Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENERGY

Nuclear Power Stations

Mr. Beith: asked the Secretary of State for Energy how many additional nuclear power stations he expects to be commissioned between 1985 and 2000.

The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): The ordering of nuclear power stations by the CEGB beyond those currently under construction cannot be considered until after the outcome of the Sizewell inquiry.

Mr. Beith: Is that all the Minister can say, when yesterday's newspapers reported that the CEGB had dusted off its plans to build another 12 nuclear power stations before the end of the century, including, of course, one at Druridge bay, Northumberland'? Is the Secretary of State planning to halve the country's dependence upon coal for energy purposes, and if so, why; or is he making the same exaggerated assumptions about energy demand as were fashionable when the right hon. Member for Chesterfield (Mr. Benn) was Secretary of State for Energy?

Mr. Goodlad: The number of stations will depend upon a range of factors, including the future level of electricity demand. The CEGB has stated that it does not intend to make applications for new power stations, nuclear or otherwise, before the outcome of the Sizewell inquiry is known. I understand that the CEGB has said that should it receive consent to construct Sizewell B, it would, subject to obtaining consent, wish to complete several PWRs before the end of the century. My right hon. Friend will consider any such applications on their merits at the time.

Mr. Portillo: If more PWR stations are to be built, does my hon. Friend imagine that the inquiries that will have to be held before each of those reactors is built will be as long as the Sizewell inquiry, or will some abbreviated form of inquiry be possible?

Mr. Goodlad: The terms of reference for any future inquiry will be set in the light of circumstances prevailing at the time.

Mr. Tony Lloyd: What is the Government's view about a safe or acceptable level of radiation exposure for the public, and how will that level be affected by the type of building programme for nuclear power stations that the Minister has discussed?

Mr. Goodlad: The Government attach the highest possible importance to nuclear safety, and any planning applications will be subject to the necessary consents.

Mr. Heathcoat-Amory: Is my hon. Friend aware that electricity is considerably cheaper in France, which is substantially dependent on nuclear energy? Does he therefore agree that anyone interested in cheaper energy prices for pensioners and other low-income groups should welcome an expansion of Great Britain's nuclear energy programme?

Mr. Goodlad: My hon. Friend makes an important point.

Colliery Closures, Yorkshire

Mr. Barron: asked the Secretary' of State for Energy if, when he next meets the chairman of the National Coal Board, he will discuss the proposed colliery' closures in Yorkshire.

The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): Individual closures are a matter for the National Coal Board in consultation with the mining unions.

Mr. Barron: I am pleased that the NCB is considering having consultations with the mining unions on closures. More than 95,000 people are unemployed in South Yorkshire at present, and the NCB proposes to get rid of job opportunities for another 10,000 people. How many jobs does the Minister think that NCB (Enterprises) Ltd. will create in South Yorkshire to try to stem that ever-increasing tide of unemployment?

Mr. Hunt: I agree with the hon. Gentleman that the role of NCB (Enterprises) Ltd. is vital. The number of jobs created will depend upon the circumstances at the time and the number of applications, but I know that there is good will on both sides of the House for the vital work of that strategic organisation.

Mr. Mason: Is the Minister aware that of the 10,000 job losses that have been announced in Yorkshire since the strike ended, 3,000 are in Barnsley and district? With the knock-on effects, that will bring the unemployment rate in my area to 21·5 per cent. That is a ruthless pace of change and the local authorities cannot create sufficient jobs to neutralise such job losses. Is the hon. Gentleman further aware of the existence of the coalfield communities campaign, in which 54 local authorities, representing 16 million people, have banded together to try to create jobs in coal mining communities? What are the Government and the National Coal Board prepared to do to help?

Mr. Hunt: As I said in reply to the previous question, it is vital that NCB (Enterprise) Ltd. should have good will on both sides of the House. My right hon. Friend and I look forward to discussing these important issues with the coalfield communities campaign.

Mr. Andy Stewart: Does my right hon. Friend agree that the Opposition would have done better to address themselves to the question of where the blame lies for all the unemployment and trouble? It lies with the president of the NUM?

Mr. Hunt: It is vital that the House should appreciate the significance of that comment. I believe that the coal industry in Yorkshire has a very good future. It has a


marvellous showcase in the Selby coalfield, which, thanks to record investment by this Government, illustrates how one can harness new technology to create low-cost high outputs. That is the great future in Yorkshire.

Mr. Ryman: rose—

Mr. Speaker: Order. Is the hon. Gentleman's supplementary question about Yorkshire?

Mr. Ryman: Of course it is, Mr. Speaker.
Is the Under-Secretary of State satisfied with the machinery for operating the colliery review procedure in the case of the threatened closure of a pit? Is the hon. Gentleman aware—I shall be most interested in his views—that the colliery review procedure is a farce? It contravenes every rule of judicial impartiality. The decision to be made in respect of a proposed colliery review procedure — [HON. MEMBERS: "In Yorkshire."] in Yorkshire or anywhere else—may be pre-empted because the regional director of the NCB can so manipulate affairs that the procedure does not operate fairly. For example, the regional director can empty a pit of men, as he has done at Bates' colliery in Northumberland.

Mr. Hunt: I believe that there is a very good existing colliery review procedure. I am pleased with what I believe to be a reasonable offer put by the NCB to the three unions concerned, thereby improving that procedure and fulfilling the agreement reached last October with NACODS. I hope that the modified procedure will be put in place as quickly as possible.

TUC Fuel and Power Industries Committee

Mr. Wrigglesworth: asked the Secretary of State for Energy when he last met the members of the Trades Union Congress fuel and power industries committee; and what was discussed.

The Minister of State, Department of Energy (Mr. Alick Buchanan): I met members of the committee on 27 February to discuss oil refining policy.

Mr. Wrigglesworth: In view of the enormous importance of the energy sector to the whole of British industry and to domestic users, will the right hon. Gentleman and his colleagues discuss with the TUC the contribution which the different sectors of the energy industry can make towards reducing costs and improving efficiency, thereby helping the competitiveness of British industry?

Mr. Buchanan-Smith: The TUC committee requested a discussion on the refining industry. We had a very good meeting on that subject. Energy as a whole is extremely important, not only to British industry, but to the economy.

Coal Industry

Mr. Douglas: asked the Secretary of State for Energy if he will make a statement on the reduction in the level of output, manning and number of pits in the British coal industry since the end of the dispute in the industry.

The Secretary of State for Energy (Mr. Peter Walker): Since the end of the strike, production has recovered well in most areas. I understand that coal deliveries last week were over 2·5 million tonnes, the highest for five years.

Mr. Douglas: Will the right hon. Gentleman give some indication of coal imports? Will he give me an assurance about investment in the Comrie colliery in Fife and the Longannet complex? Will he also comment on morale in the industry, especially in Scotland where 203 men who were dismissed during the strike have not been re-employed because of the obduracy and bone-headedness of the NCB chairman?

Mr. Walker: I think that morale in the industry would have been adversely affected by some of the violence displayed in Scotland. Obviously, such a dispute will have certain effects. I shall write to the hon. Gentleman about investment in the colliery to which he referred.

Mr. Maude: Does my right hon. Friend agree that it is crucial for the NCB to move from high-cost to low-cost capacity, and that an important contribution to that change will be the speedy implementation of the plans for the south Warwickshire prospect?

Mr. Walker: I believe that a general welcome has been given to the fact that in south Warwickshire there is potential for a very heavy investment programme and production of coal at low cost. That is certainly important to the industry's future.

Mr. Ray Powell: I remind the Secretary of State that the purpose of the coal mining dispute was primarily to fight against pit closures. Is the right hon. Gentleman aware that the NCB has already announced the closure of St. John's colliery in Maesteg? Three weeks ago, I asked the rigt hon. Gentleman whether he would set up an inquiry to ascertain why that colliery would be closed and whether he would give me some details. I remind him that on Saturday I attended the last function of the mining apprentices club in mid-Glamorgan. That club, which was established 15 years ago, has had to be wound up because it no longer has sufficient apprentices.

Mr. Walker: At regional level, I know that the proposals for Wales are being discussed among the unions. The modified pit closure procedure that has been suggested by the NCB will be raised in further discussions with those unions. Any closure will be fully looked at, if necessary by an independent group, before any final decision is made.

Mr. Peter Bruinvels: Why should my right hon. Friend have to talk about reductions in coal output when it was Scargill who caused such reductions? Should not my right hon. Friend congratulate pits, such as the Leicestershire coal mines, on their excellent output and good manning levels? Will he join me in criticising what the Select Committee on Employment has done? That Select Committee, and no one else, has diminished morale in the industry. We should be encouraging our miners to get on with the job of producing more coal.

Mr. Walker: In my reply I said that production in most parts of the country is fast returning to normal levels, and in some areas it is at very high levels. The fact that more coal was moved last week than at any time for five years is another reflection on the fact that the industry needs encouragement and that some people should not take the attitude that my hon. Friend has mentioned.

Mr. Orme: What discussions has the Secretary of State had about a new "Plan for Coal"? He will be aware that the present plan runs out this year. Does he agree that if


we are looking to the future of the industry there should be an overall plan, which could be agreed between the unions, the Government and the NCB?

Mr. Walker: Yes. I gather that in that sphere the board is preparing views to put to the unions. There will be a meeting with the unions to discuss in principle what is required for a plan that will produce coal at the right price to take full advantage of the market opportunities and of the high investment that has gone into that industry. Therefore, I believe that talks will take place along the lines that the right hon. Gentleman envisages.

EC Energy Policy

Mr. Knox: asked the Secretary of State for Energy whether he is satisfied with progress towards the development of a European Community energy policy.

Mr. Goodlad: We are now satisfied that progress is being made.

Mr. Knox: Does my hon. Friend realise that some of us feel that progress has been disappointingly slow so far? Do the Government intend to take any initiative to try to speed up progress in achieving such a policy?

Mr. Goodlad: I note my hon. Friend's view. Community energy objectives provide a framework for national energy programmes and actions. This country's policies have made a major contribution to improving the Community's energy position. We share the Commission's view that we need to continue with effective policies for the future.

Mr. John David Taylor: Will the Minister confirm reports that the French authorities have offered to provide cheaper electricity by cable to the United Kingdom? If so, what is the Government's response?

Mr. Goodlad: The Central Electricity Generating Board and EDF have agreed to construct a 2,000 MW cross-Channel link. The first half will be available later this year, and the second half a year later. The CEGB has agreed with EDF the commercial arrangements for the operation of the first half of the link during the first two years. There are no agreements covering the period after that.

Mr. Beaumont-Dark: Could my hon. Friend translate into one of the European languages what he means by "progress"? How much progress, how much cost and how long?

Mr. Goodlad: I understand that the rules of the House forbid me to translate into foreign languages.

Mr. Rowlands: The Minister might try Welsh, and he might get away with it. Is he aware that the Secretary of State has given repeated assurances that he will not allow the Commission to interfere in the financing and subsidising of the national coal industry in the United Kingdom? Is he further aware that there is an attempt to dilute the national veto over several areas in the EEC context which are to be discussed in the next few weeks? Will the hon. Gentleman assure us that it will remain the right of our Government to decide on the subsidising and financing of the National Coal Board?

Mr. Goodlad: Yes, Sir. No Commission proposals have been received yet, although, as the hon. Gentleman

knows, new Community legislation will be required by the end of the year to regulate national aids for coal. Otherwise, they would breach the European Coal and Steel Community treaty. My right hon. Friend the Secretary of State has already told Commissioner Mosar that the proposals will have to reflect the interests of the major coal-producing member states. Energy programmes carried out under article 235 require unanimous Council agreement. The ECSC treaty contains provision for majority voting in some cases. However, any decision to replace the existing state aids regime would require Council unanimity.

Dismissed Miners (Scotland)

Mr. Orme: asked the Secretary of State for Energy what discussions he has had with the chairman of the National Coal Board about the re-employment of dismissed National Union of Mineworkers' members in Scotland.

Mr. Peter Walker: Of 9,808 miners arrested during the dispute, more than 7,000 were charged. Of the 5,653 cases so far dealt with, 4,318 were convicted. It is against those figures that one must recognise that 1,019 were dismissed. The board has been reviewing dismissal cases, and 414 miners who were dismissed have been reemployed. I have been assured by the chairman, as he assured the Select Committee on Employment, that area management is continuing the board's policy of reviewing dismissal cases.

Mr. Orme: On a point of order, Mr. Speaker. This question relates specifically to Scotland. Why did the Secretary of State not answer it?

Mr. Walker: The facts, figures and the whole approach apply to Scotland in the same way as to everywhere else.

Mr. Orme: rose—

Mr. Speaker: Order. Will the right hon. Member for Salford, East (Mr. Orme) confine his question to Scotland, because I shall expect every other hon. Member who is called to do the same?

Mr. Orme: Is the Secretary of State aware that the decisions that have been taken in Scotland are outrageous, because, of 203 men who have been dismissed, not one has been reinstated? Is this not a matter of natural justice, as has been underlined by the all-party Select Committee report? What action is the right hon. Gentleman prepared to take over Scottish miners who have been dismissed?

Mr. Walker: The right hon. Gentleman used the phrase "all-party Select Committee report". It is true that one Conservative Member agreed with parts of that report, but, as the right hon. Gentleman well knows, that report has been widely condemned for having no— [Interruption.] A report which failed to deal completely with the violence that took place—[Interruption.] I assure the House that matters in Scotland are being reviewed on the same basis as elsewhere. Those cases will be carefully considered. I hope that the right hon. Gentleman, on behalf of the Opposition, will condemn the view, expressed by the right hon. Member for Chesterfield (Mr. Benn) and by the leader of the NUM, that people who are convicted of violence should receive an amnesty.

Several Hon. Members: rose—

Mr. Speaker: I call Mrs. Currie to ask a question about Scotland.

Mrs. Currie: Has not each Scottish miner who was sacked exactly the same right as sacked miners elsewhere to go to an industrial tribunal—[Interruption.] Is it not also a fact that in some parts of the country —[Interruption.]

Mr. Speaker: Order. The hon. Lady should be allowed to ask her question.

Mrs. Currie: Is it not also a fact that in some parts of the country sacked miners are being reinstated by industrial tribunals and that their rights are being upheld? Does not the unwillingness of the Scottish miners and others to go to court show that they are not interested in staying within the law or using it when it is to their benefit?

Mr. Walker: My hon. Friend is quite right. The NCB made it clear to the Select Committee that it will carefully consider any tribunal findings.

Mr. Donald Stewart: Is the Secretary of State aware that, despite what the hon. Member for Derbyshire, South (Mrs. Currie) said, sacked miners in Scotland do not apparently have the same rights as other miners in the United Kingdom? It is quite clear that the policy being pursued in Scotland is vicious and irrational compared with the policy being followed in other regions of the United Kingdom. People who did not support the strike, or were not fully behind it, now see that a totally vicious policy is being pursued in Scotland. If the Secretary of State takes no action, it will be clear that he is pursuing the same policy as the National Coal Board.

Mr. Walker: As the board has told the Select Committee, it is continuing to review all cases, including those in Scotland. Many people in Scotland who witnessed some of the events around Bilston Glen certainly believe that it is right that some of the miners involved should have been dismissed.

Mr. Baldry: Does my right hon. Friend agree that in Scotland and elsewhere the NUM thought that at the end of the dispute it could secure a general amnesty, as it succeeded in doing in 1972 and 1974, and, therefore, many miners were encouraged to participate in violence or intimidation, in the hope that they would have immunity in the short term and in the belief that they could secure an amnesty in the long term? Is it not extraordinary that in the middle of the 20th century anyone should argue that employers should be forced to retain or reinstate men who have burnt their buses, smashed their equipment and assaulted their staff? Is it not right to deal with such conduct through industrial tribunals? Has my right hon. Friend noticed that the Select Committee, whatever else it said, could not bring itself to say that miners had been unfairly dismissed in the dispute?

Mr. Walker: The points made by my hon. Friend, who served on the Select Committee, are perfectly correct. Regarding the arguments about an amnesty, it is interesting that both the president of the NUM and the right hon. Member for Chesterfield have said that not only should an amnesty be given by the National Coal Board, but that if a Labour Government came to office an amnesty would be given for sentenced miners, no matter what they were sentenced for by the courts. So far we have no sign from the Leader of the Opposition that he disagrees with that view.

Mr. Douglas: Will the Secretary of State pause and consider the question that was asked, which was specifically about Scotland? Two hundred and three men have been dismissed, and not one of those cases has been discussed by the board in Scotland with a view to re-engagement. I gave some information to the Parliamentary Under-Secretary of State, but will the Secretary of State undertake to meet Scottish Members of Parliament and go through this issue and then meet the National Coal Board to ensure fairness and justice, because we are manifestly not getting that at present?

Mr. Walker: As the hon. Gentleman knows, I have never refused to meet Members of Parliament on any question, and I will always meet them.

Mr. Neale: Does my right hon. Friend accept that many of his Conservative colleagues feel strongly that he should not intervene in matters where miners have been dismissed in this way, and neither should Parliament? Does he accept that if the Select Committee's report, which was decided on the casting vote of the Chairman—and an Opposition Member at that—were put into effect by the House it would lead to the peculiarity of giving miners rights under the law which no other groups enjoy?

Mr. Walker: I am interested to know whether there is a similar desire by the Select Committee to investigate some of the ghastly instances of intimidation of working miners which took place.

Mr. Foot: Is it not the case that many of the individual decisions being taken by the board not to reinstate miners—Scotland is the worst affected, but other parts are also affected—will poison relations for weeks, months and perhaps years to come? Is it not also the case that the Secretary of State has the right to intervene? If so, why does he not do so?

Mr. Walker: The point is made clearly by the figures that I gave to the House. Of 5,653 convictions, slightly more than 1,000 were dismissed, and already 414 have been reinstated. Those figures show that careful consideration has been given.

British Gas

Mr. Colvin: asked the Secretary of State for Energy whether he will make a statement on the expansion plans of British Gas prior to privatisation.

Mr. Buchanan-Smith: No, Sir. Business plans are a matter for the corporation.

Mr. Colvin: That reply was not particularly helpful.
Will my right hon. Friend tell the House what steps he intends to take to persuade British Gas to honour such commitments as it has entered into to expand services to rural areas, because there is a growing feeling in rural areas, especially among domestic consumers, that if they did not get gas prior to privatisation they will never get it?

Mr. Buchanan-Smith: My hon. Friend raises an important and sensitive issue, and I am glad to reassure him that the present obligations of the British Gas Corporation will be carried over to the new company.

North Sea Oilfields

Mr. Skeet: asked the Secretary of State for Energy what information he has about the cost of production of North sea oilfields recently brought on stream.

Mr. Buchanan-Smith: The average cost per barrel for fields which started production between 1980 and 1984 is estimated to be £9. The corresponding cost for fields now under development is £13.

Mr. Skeet: Does my right hon. Friend agree that the reduction in oil prices and movements in the exchange rate will affect the profitability of those fields and that something must be done for them? Will he recommend mergers and the rationalisation of some small firms which have applied and been successful in the ninth round?

Mr. Buchanan-Smith: Of course if the price of oil falls that affects profitability. However, I hope that my hon. Friend will reflect on the figures that I have given. The price will have to fall a long way before the North sea becomes unprofitable.

Mr. Rowlands: Is the Minister aware that the future lies in enhanced oil recovery from existing fields? Since nothing was done this year to encourage that development, what urgent consideration is he giving to future proposals in this regard?

Mr. Buchanan-Smith: As the hon. Gentleman knows, this matter was considered in the preparation for the Budget this year, and a case was not made out on the information presently available. My right hon. Friend the Chancellor of the Exchequer has invited the industry to reconsider its case, and has said that he will consider it when it is presented. The hon. Gentleman has raised an important issue.

Coal Mines (Ownership)

Mr. Leigh: asked the Secretary of State for Energy what is his policy towards the sale of deep mines surplus to National Coal Board requirements to other operators; and if he will make a statement.

Mr. Willie W. Hamilton: asked the Secretary of State for Energy what recent representations he has received regarding the future ownership and structure of the coalmining industry; and if he will make a statement.

Mr. Peter Walker: The Government have no plans to privatise the mining activities of the National Coal Board.

Mr. Leigh: Just as launching other nationalised industries on the road to profitability was a precursor to privatisation, will the defeat of the Luddites in the NUM, and turning back the Coal Board from everlasting reliance on state subsidies, be a precursor to the gradual privatisation of pits? If not, why not?

Mr. Walker: The present losses and deficits in the industry are a great disadvantage to the country, to those who work in the industry and to its prospects. However, I hope that we shall find ways of giving NCB employees much more direct participation in the industry than they enjoy under nationalisation.

Mr. Willie W. Hamilton: Is the Minister aware that the NUM and others in the mining communities will welcome his statement that neither he nor the Government have any intention of privatising the coal industry?

However, since it is an important part of the work of the industry to improve industrial relations, does he accept that until he gets rid of Mr. MacGregor as the chairman of the NCB industrial relations will not improve to the point that we require?

Mr. Walker: At present, there are plenty of examples of co-operation and of pits going well. I gave the figures for the production and distribution of coal this week, and there are some encouraging signs. I do not wish to become involved in making judgments on any personalities. Mr. MacGregor's definition that the best future for the industry would be to have an expanding market with highly effective coal production as a result of high investment is the only sensible analysis of the future of the industry. I should have liked to give the hon. Gentleman a more helpful reply in his birthday week, but I regret that I cannot do so.

Mr. Rost: Does my right hon. Friend at least have plans to liberate opencast operations from the restrictive patronage of the NCB?

Mr. Walker: It is important that we take advantage of the opencast opportunities that exist. In some parts of the country, especially Scotland and Wales, such a step would be important for jobs.

Mr. Barron: Although I do not agree with the privatisation of the coal mining industry, does the Minister believe that selling surpluses will do any good? Presumably, the reason for closing collieries now is that the coal is surplus to requirements. What is the sense of selling them?

Mr. Walker: The sense is to produce coal in the future at a price at which the world wishes to buy it.

Mr. Eggar: If approaches were made by other operators or by miners currently employed by the NCB to purchase NCB assets or to become involved in joint ventures with the NCB, would the Government stand in the way of an NCB decision to sell its assets?

Mr. Walker: The NCB is considering several such applications from miners. However, the matter is more complicated than it sounds, because I fear that the miners who have made applications in respect of the pits at which they work have not taken into their calculations the enormous investment that is required to maintain safety standards in pits. That is not a simple process. Any approach by miners will be considered by the National Coal Board and be regarded sympathetically by the Government.

British Gas

Mr. Pike: asked the Secretary of State for Energy what recent representations he has received regarding his proposals to privatise the British Gas Corporation.

Mr. Peter Walker: I have received a number of representations from various organisations and individuals. I have also met the chairman of the National Gas Consumers Council and will be meeting representatives of unions.

Mr. Pike: Does the Secretary of State admit that the move towards privatisation of the British Gas Corporation arises out of political dogma and to help raise money that


the Government need? Does he accept that the best interests of consumers and of safety will be served by leaving the corporation in public hands?

Mr. Peter Walker: No. The move to privatise the British Gas Corporation will be good for consumers, employees and the country.

Mr. Portillo: Has my right hon. Friend received any representations from the gas producers? Is he afraid that the monopoly position of British Gas might discourage exploration in the North sea, to the detriment of jobs in Britain?

Mr. Walker: I have received no such representations, but I can assure my hon. Friend that British Gas and the Government have a vested interest in encouraging the maximum development of the North sea. I can assure my hon. Friend that that will take place.

Mr. Wrigglesworth: Is the Secretary of State aware that the country will not be able to judge whether the move will benefit anyone until we have seen the details of the proposals? Will the right hon. Gentleman publish the details long before legislation is brought before the House? In particular, will he tell the House on what principles gas prices will be fixed?

Mr. Walker: Of course we shall publish proposals in advance of legislation. Knowing the terrific mental application of the Social Democrats, I am sure that they will have no difficulty in formulating their view long before legislation is introduced.

Mr. Andy Stewart: Is it because of what my right hon. Friend has said that British Gas has taken space in the country's Left-wing magazines' colour supplements in the last fortnight?

Mr. Walker: I do not know whether one would describe The Economist and the Spectator as Left-wing magazines, but since British Gas advertise in them, too, a tolerable balance has been achieved.

Mr. Orme: Will not the proposals be good for Rothschild's as well? In view of the role that it played in Britoil and Amersham International, is this not another disgraceful appointment by the Government?

Mr. Walker: Rothschild's had its association with Waterloo, and perhaps the right hon. Gentleman's remarks will go the same way.

Coal Industry

Mr. Spencer: asked the Secretary of State for Energy if, when he next meets the chairman of the National Coal Board, he will discuss the future development of the coal industry in Leicestershire.

Mr. David Hunt: I am aware of the National Coal Board's plans for the development of the coal industry in Leicestershire and expect to discuss them with the chairman of the board from time to time as they develop.

Mr. Spencer: Does my hon. Friend agree that the development of the industry in Leicestershire is an admirable model for other parts of the country, with its high investment, high wages and high productivity? Does he agree also that the coal industry as a whole would do better to concentrate on a rosy future rather than on looking over its shoulder at the outworn ideas and outworn pits of the past?

Mr. Hunt: My hon. Friend put the agument well. There is an exciting future for the industry in the area, with the movement towards low-cost, high productivity pits. I understand from the National Coal Board that work on the sinking of the shaft at Asfrodby will begin next month. Productivity at such pits is expected to reach five times the national average. That is good news for everyone connected with this great industry.

Mr. Janner: Is the Minister aware that high productivity and excellence in the coal mining industry in Leicestershire has not prevented what will be the devastation of that industry by the closing of a considerable number of pits and by saving only a few jobs as a result of opening the mine at Asfordby? Will the Minister promise that the remaining pits in the Vale of Belvoir will soon be open so that the production to which he refers can save the industry, not only in Leicestershire, but in the midlands, where it is so badly needed?

Mr. Hunt: The hon. and learned Gentleman has his facts wrong. The numbers employed in the coal industry in that area will increase by the end of the century. I wish that the hon. and learned Gentleman would spend his time paying tribute to the miners in the south midlands area, who worked throughout the strike and showed their good sense and support for an industry that will produce competitively priced coal.

Mr. Woodall: asked the Secretary of State for Energy if, when he next meets the chairman of the National Coal Board, he will discuss industrial relations in the coal industry.

Mr. Peter Walker: My regular discussions with the chairman cover all major aspects of the coal industry.

Mr. Woodall: Is the Secretary of State aware that industrial relations in the mining industry are at zero level? Are they not worse than they have ever been since the pits were nationalised in 1947, and almost as bad as they were under private enterprise? Is the right hon. Gentleman further aware of the position at South Elmsall Frickley colliery where workmen and retired workmen have held fishing rights on two ponds for more than 60 years? The ponds were acquired by the NCB in 1974 to provide water for washing and fire fighting. Does he realise that the NCB has told the miners that they can no longer fish those two ponds? That has caused a great deal of upset in the village.
Is the right hon. Gentleman aware that Acton Hall colliery in Featherstone—

Mr. Speaker: Order. I hope that this is related to industrial relations.

Mr. Woodall: It certainly is, Mr. Speaker.
Is the Secretary of State aware that Acton Hall colliery is the first to have its closure announced since the strike, that all men over 50 have been made redundant, that men under 50 have been asked to volunteer for redundancy and that 112 have volunteered with 17 being made redundant? The others will be transferred—

Mr. Speaker: Order. The hon. Gentleman must not make a speech.

Mr. Walker: I recognise the hon. Gentleman's considerable anxiety about the problems in his constituency. Obviously, I do not know about the fishing rights and therefore cannot comment on that. As the figures I have given show, over much of the country


production is increasing and acceptance of change is taking place in a good way. I hope that everybody will encourage that. There is no doubt that if we continue with the sort of approach that stops development, investment and sensible production of coal, the industry will have a bad future rather than a good one. There is a duty on the leadership of the NUM to pay far more attention to encouraging productivity rather than encouraging dissatisfaction.

Oral Answers to Questions — HOUSE OF COMMONS

Parliamentary Lobbying

Mr. Willie W. Hamilton: asked the Lord Privy Seal what recent representations he has received on the amount of parliamentary lobbying by outside interests and the number of hon. Members being retained by such outside interests; and if he will make a statement.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I have received a number of representations on this topic, and a report on parliamentary lobbying has also been made recently by the Select Committee on Members' Interests.

Mr. Hamilton: Is the right hon. Gentleman aware that the Select Committee report to which he referred fudged the issue posed in my question? Is he not concerned about the rapid growth of what I call parliamentary political prostitution, because hon. Members — especially Conservative Members — are selling their services to outside interests for unknown sums of money? That is bringing Parliament into great disrepute. Will he given an undertaking that the report will be debated in the House at a very early date?

Mr. Biffen: I take at once the concern that the hon. Gentleman expresses, which I imagine is in the context of the fact that the current Register shows that 120 Members of Parliament are now parliamentary consultants—an increase of 50 per cent. on the Register for the previous year. However, I doubt whether the debate is elevated by partisan accusations. I shall, of course, consider his point about a debate.

Mr. Marlow: Is my right hon. Friend aware that there are a small number of Opposition Members who move heaven and earth to ensure that large numbers of immigrants are allowed to stop in this country? Will he investigate whether they are doing that with the best parliamentary interests in mind, or whether other things are at the back of their minds?

Mr. Biffen: I think that that question goes somewhat wide of the original question. I do not think that I would encourage a detached assessment of the problem if I followed that line.

Secretarial and Research Allowances

Mrs. Clwyd: asked the Lord Privy Seal what recent representations he has received from hon. and right hon. Members about the level of secretarial and research allowances; and if he will make a statement.

Mr. Sedgemore: asked the Lord Privy Seal what recent representations he has received from hon. and right hon. Members about staffing facilities; and if he will make a statement.

Mr. Biffen: I have received a number of representations from right hon. and hon. Members about this matter, including several parliamentary questions.

Mrs. Clwyd: Is the Leader of the House aware that 202 Members of Parliament, from both sides of the House, have signed a motion showing general dissatisfaction with the present system? Most hon. Members underpay their staff if they employ more than one. Will the right hon. Gentleman receive an all-party deputation to discuss this matter further?

Mr. Biffen: Certainly.

Mr. Sedgemore: Is the right hon. Gentleman aware that his parsimony and puritanism in these matters are making this legislature the laughing stock of the Western world? Why does he side with the Executive in seeking to turn Members of this legislature into a squalid version of Ruritania?

Mr. Biffen: The hon. Gentleman has a good turn of phrase in personalising all these great matters. It is not my parsimony but a vote of the House, by 95 to 52, which set the present scales for the secretarial and research allowance.

Mr. Soames: Is my right hon. Friend aware that there are those who consider the allowances to be perfectly adequate—[Interruption.]

Mr. Speaker: Order. Every point of view is expressed in the House.

Mr. Soames: Is my right hon. Friend aware that there are those in this House who believe that to ask for more is a load of pretentious nonsense?

Mr. Biffen: I note what my hon. Friend says, and I look forward to the possibility that, in her generosity, the hon. Member for Cynon Valley (Mrs. Clwyd) will ask him to join her delegation.

Mr. Forth: Does my right hon. Friend consider that he should also give weight to the 450 right hon. and hon. Members who have not signed the motion to which the hon. Member for Cynon Valley (Mrs. Clwyd) referred? Has he also considered that the excessive number of written questions now appearing on the Order Paper indicates an excessive number of research assistants already?

Mr. Biffen: My hon. Friend makes a fair point, but I must also have regard to the fact that the present level was determined by a vote of the House about 12 months ago. In any case, we have a provision for its review in due course.

Private Members' Bills

Mr. Beith: asked the Lord Privy Seal whether he will refer to the Procedure Committee the question of time for Private Members' Bills.

Mr. Biffen: I understand that the Committee is considering how best to deal with these matters.

Mr. Beith: When a Bill has been strongly supported on Second Reading and extensively discussed in Committee, does the Leader of the House think it right that the House should be able, if it chooses, to extend its sitting hours to reach a decision on the matter? If he does not


think that, will he accept the degree of restraint on the Government's legislative enthusiasm that would result if he stopped tabling motions asking hon. Members to sit after 10 o'clock to consider Government Bills?

Mr. Biffen: That is precisely the type of question that should be central to the considerations of the Procedure Committee.

Sir Geoffrey Finsberg: The House passes a resolution saying what amount of time should be allocated to private Members. Is my right hon. Friend aware that, however strongly those of us who support a particular Bill feel about it, we feel even more strongly that those conventions passed by resolution should not easily be overturned?

Mr. Biffen: That is a reasonable general proposition, but when tested in certain singular circumstances, great passions are released and the task that has been given to the Procedure Committee will be formidable when it looks at the principles that are involved in the governing of private Members' time.

Register of Members' Interests

Mr. Winnick: asked the Lord Privy Seal if he has received any proposals for changes in the Register of Members' Interests.

Mr. Biffen: The Select Committee on Members' Interests has recently reported to the House and recommended that various categories of non-Members having access to Parliament should be required to register details of their employment outside the House.

Mr. Winnick: While welcoming that recommendation, which I hope will soon be implemented, may I ask whether the right hon. Gentleman is aware that a further change that is undoubtedly required is for right hon. and hon. Members to state in the Register the source and amount of income received? Does he agree that without details of the amounts of money received, the Register is of limited importance?

Mr. Biffen: The hon. Gentleman is right to remind us of the limitations of the Register and, therefore, of the extent to which one should try to place significance on it. In calling for the degree of relevation contained in his supplementary question, I think he will find that he has touched on a very controversial issue indeed.

Mr. Harris: Will my right hon. Friend stick to his present line of refusing to recommend to the House the setting up of a register of political lobbyists, partly because to do so would be giving a bogus status to those lobbyists, but also because the House cannot enforce the present Register of Members' Interests, since the right hon. Member for South Down (Mr. Powell) cocked a snook at the requirement to register his interests?

Mr. Biffen: I very much agree that whatever the House decides in this area should be related to enforceability. On reflection, I think that the evidence that I gave on this issue was well placed.

Mr. Faulds: Will the Leader of the House accept that I share the animadversions of my right hon. Friend the Member for Fife, Central (Mr. Hamilton) on the recent report on lobbying? Does he agree that it was an extraordinarily superficial exercise? Is it not time that we

had a much more stringent and profound examination of the whole question of Members' interests and lobbying in the Palace?

Mr. Biffen: The hon. Member for Walsall, North (Mr. Winnick) has only recently commended the report. However, it has now been attacked by two hon. Members. That goes to demonstrate that there is no general judgment of view upon it. I take the hon. Gentleman's point about the significance—

Mr. Faulds: Has the right hon. Gentleman read it?

Mr. Biffen: Yes, I have. I trust that I am joined in that eccentricity by the hon. Gentleman.

Oral Answers to Questions — CIVIL SERVICE

Civil Service Unions

Mr. Soley: asked the Minister for the Civil Service when he last met the Civil Service unions; and what matters were discussed.

Mr. Teddy Taylor: asked the Minister for the Civil Service when he next plans to meet representatives of the Civil Service unions.

The Minister of State, Treasury (Mr. Barney Hayhoe): I last met the Civil Service unions on 14 June, with my right hon. Friend the Chancellor of the Exchequer, when matters relating to the pay of the non-industrial Civil Service were discussed. Neither I nor my right hon. and noble Friend the Chancellor of the Duchy of Lancaster have any specific plans to meet the Civil Service unions now.

Mr. Soley: When the Minister next meets the Civil Service unions, will he undertake to discuss with them a further review of security procedures in the Civil Service? Is it not time that he accepted Lord Denning's original definition of subversion as an attempt to overthrow parliamentary democracy by unlawful means? If he does not think that that is an acceptable definition, will he tell the House what he thinks is wrong with it?

Mr. Hayhoe: If the Civil Service unions wish to discuss that issue with me, I am sure that they will be in touch with my office to arrange a suitable time.

Mr. Taylor: Does my right hon. Friend agree that it is desirable that we should have an early settlement of current pay claims? Is he aware of the special problem that is faced by the Civil Service in some areas near London because of the vast number of civil servants who are resigning as a result of the wide difference between salaries in the public and private sectors?

Mr. Hayhoe: There are a number of people who are resigning from the Civil Service. There are particular difficulties in and around London for specific grades, but, generally speaking, there is no great problem. It is in areas of specialist experience and knowledge where there are sometimes particular problems. Special measures have been taken to deal with them and will be taken again if necessary.

Mr. Boyes: Does the Minister recall that when a strike of computer operators took place at Newcastle in 1984 it was over a sum of about £50,000? Is he aware that the Minister for Social Security has told me that the


Government spent £145 million over that strike? When the right hon. Gentleman next meets the Civil Service unions, will he justify spending £145 million of taxpayers' money to save £45,000 to £50,000? Will he consider telling hon. Members how he can justify such an outrage?

Mr. Hayhoe: The figures that the hon. Gentleman has quoted show the great irresponsibility of the local Civil Service union leaders who were responsible for the strike, which I know was not supported nationally. It arose over an issue on which there was no need for a strike to have taken place.

Mr. Key: What further special measures will my right hon. Friend consider taking in special circumstances in the Civil Service, bearing in mind that in some areas, such as Boscombe Down and Porton Down in my constituency, there is great unrest in a loyal Civil Service about the threat of contractorisation.

Mr. Hayhoe: The special measures that I had in mind were along the lines that we followed earlier, of responding when there is an absolute need to increase pay. We have done that recently, for example, for inspectors of taxes. Measures like that can be taken. I believe that it is the majority view in the House that if there are areas within the public sector where work can be carried out more efficiently by the private sector, we should move in that direction with all due speed.

Mr. Winnick: As the Minister responsible for answering Civil Service questions in the House, is the right hon. Gentleman aware that of the immense admiration felt on the Labour Benches for the people at GCHQ who refused to give up their trade union membership, despite all the pressure from the Government? Does he realise that those are the very people who uphold our democratic claims? As they are not in Latin America or Eastern Europe, should they not be allowed to retain their union membership and their employment?

Mr. Hayhoe: The hon. Gentleman is trying to re-run matters which have been fully debated in the House. In any case, he knows that they are the primary responsibility of my right hon. Friend the Foreign Secretary.

Mr. Eggar: Is my right hon. Friend able to say how many people are now employed in the Civil Service? Is he satisfied that the unions are co-operating fully with the financial management initiative and other value-for-money initiatives?

Mr. Hayhoe: I commend the great co-operation that civil servants, from the low grades to the higher grades, are giving in trying to provide better value for money. The number of civil servants is now just below 600,000. It is the first time that the figure has been at that level since the end of the second world war. That is a remarkable achievement.

Dr. McDonald: Is the Minister aware that the letter from the chairman of the Board of Inland Revenue dated 24 May 1985 to the Association of Her Majesty's Inspectors of Taxes is the subject of one of a long series of complaints brought by the Council of Civil Service Unions and the Trades Union Congress, under convention 151 of the International Labour Organisation, about the Government's behaviour as an employer, and is at present being considered by the ILO?
Is the Minister aware that he may have misled the House about the nature of the letter, during the last Civil Service Question Time, by quoting selectively from it?
Is the Minister further aware that the letter implies that the career prospects of Inland Revenue staff could be put at risk by taking industrial action, since the chairman's letter clearly states that that is one of a number of factors that will be relevant to decisions about promotion? Will he now agree that that is no way to conduct industrial relations within the Civil Service?

Mr. Hayhoe: Those matters were not discussed when I last met the Civil Service unions, nor, to my knowledge, are they seeking a meeting on them. Matters concerning the ILO are for my right hon. Friend the Secretary of State for Employment.
The hon. Lady spoke of misleading the House. As I placed the full text of the letter in the Library of the House immediately after quoting from it, I do not see how it can be suggested that I misled the House. I admit that, having quoted only a sentence or a phrase from the letter, by definition that was a selection, but I thought that it put the balance right in view of the hon. Lady's question at that time.
There was nothing new about general policy in the letter, because I had made the same policy report to the House at Question Time some weeks before, so the hon. Lady's main charge falls completely.

Mr. Peter Bruinvels: Is it normal and decent for the Leicester DHSS to challenge all the Members of Parliament based within the city of Leicester to a debate on the social security Green Paper by writing to the Leicester Mercury rather than having the courtesy to write direct to Members of Parliament? Is the method of notifying the press rather than giving Members of Parliament a personal invitation—

Mr. Speaker: Order. The hon. Gentleman's point is somewhat wide of the question.

Mr. Hayhoe: It is certainly not my responsibility, but I suspect that my hon. Friend will be doing all right in the Leicestershire press.

Oral Answers to Questions — HOUSE OF COMMONS

European Community Legislation

Mr. Teddy Taylor: asked the Lord Privy Seal how many statutory instruments, draft directives and other legislative instruments recommended for further debate by the Select Committee on European Legislation are still awaiting debate on the Floor of the House; and if he will make a statement.

Mr. Biffen: At present there are 42 such documents recommended for debate on the Floor of the House. Many of these will, however, become relevant only when active negotiations resume in Brussels.

Mr. Taylor: The Government are constantly and rightly saying that we can and should pay more attention to public expenditure. Does my right hon. Friend feel that the revelation on Friday that the EEC is this year spending £7,000 million on destroying, dumping or storing surplus foods requires us to spend a little more time in considering EEC matters generally? Does he believe that it will be possible to get through the backlog by the end of the Session?

Mr. Biffen: We have made steady progress with the consideration of that type of document—46 have been debated so far this Session. I do not think that wider issues about the common agricultural policy flow directly from this question.

Mr. Marlow: On a point of order, Mr. Speaker. Would we not normally go back to Energy questions now?

Mr. Speaker: Order. The hon. Gentleman knows that we go back to the previous group of questions.

Mr. Skinner: Does the Leader of the House agree that, to get rid of all of these draft directives, it would be a good idea for his right hon. and hon. Friends to join the Opposition tomorrow night in saying that we will not vote that £252 million, whereupon the rest of the directives would become irrelevant?

Mr. Biffen: That is an attractive thought, but I do not think that it is entirely accurate.

Secretaries and Research Assistants

Mr. Soley: asked the Lord Privy Seal what proportion of total cost of Members' salaries and allowances is represented by remuneration of hon. Members' secretaries and research assistants.

Mr. Biffen: The proportion in the financial year 1984–85 was approximately 22 per cent.

Mr. Soley: Does the Leader of the House agree that that figure, and some of the others that he has given today, show that the time is ripe for a conciliatory move by him towards hon. Members by allowing a debate and a vote on parliamentary allowances and facilities in the House?

Mr. Biffen: I thought that, though monosyllabic, my response to the hon. Member for Cynon Valley (Mrs. Clwyd) was conciliatory.

Select Committee on Employment (Report)

Mr. Greville Janner: On a point of order, Mr. Speaker. I wish to raise a point of order concerning the report of the Select Committee on Employment dated 19 June. In accordance with Standing Order No. 99, the Committee was appointed to examine the expenditure, administration and policy of the Department of Employment and associated public bodies. On 19 June, there were two Divisions in the Select Committee. The first was on an amendment proposed by a Conservative Member. As was said earlier at Question Time, that amendment was defeated by the Chairman's casting vote. The Committee then decided by five votes to three that that important report be submitted to the House, which it duly was.
I seek your guidance, Mr. Speaker, concerning the proper treatment of Select Committee reports, irrespective of whether they are presented by a casting vote, by a majority, by a member of one party or by a member of another. I should have thought that such reports should be treated with respect by the House and by the Government. A report of such substance which makes important recommendations should be debated. At the very least, the Minister concerned should make a statement, or a proper reply should be given. Instead of that, the Government have made no statement, have had no debate and have given no reply. They have merely referred to the report during Question Time, and the references have often been utterly irrelevant to the question being asked.

Mr. Speaker: Order. What is the point of order?

Mr. Janner: My point of order is whether it is in order for the Government to refuse to provide the House with any facilities to discuss a Select Committee report and to refuse to answer questions on a matter which affects many hundreds of British citizens.

Mr. Speaker: Order. The House and the hon. and learned Gentleman know that, when a Committee has made its report, it is up to the House—certainly not the Chair—to decide what action to take. It is not a matter for me.

Mr. Max Madden: Further to the point of order, Mr. Speaker. You will remember that Opposition Members were worried about the Secretary of State's reply to question 6, which referred to Scotland. There was also anxiety on both sides of the House that the Secretary of State referred to the Select Committee report in the most dismissive terms. Is it in order for a Secretary of State of one Department to rubbish a Select Committee report before that Committee has received a response from the Department to which it relates?

Mr. Speaker: I should be chary about echoing comments such as "rubbishing" a report. The hon. Gentleman knows that this matter is not for me. The Secretary of State, like every other hon. Member, must make his own justification for what he says.

Young Homeless People (Cleveland)

Mr. Frank Cook: ; I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the visit of the Parliamentary Under-Secretary of State for Health and Social Security, the hon. Member for Wycombe (Mr. Whitney), to Cleveland on Thursday last and the views that he expressed on the plight of the young homeless people in Cleveland county.
The matter is specific because it relates to the visit of a Minister to Cleveland and to the fact that he chose to close his eyes and stop his ears to the abundance of readily available evidence about the plight of young homeless people in the area. Then, without any recourse to lousing department records, voluntary aid group registers or church council experience, he proceeded to give public utterance to statements running diametrically counter to the real situation.
The matter is important because of the numbers affected by the regulations. There are 650 in Stockton, 2,500 in Cleveland and more than 50,000 throughout the country. The matter is also important because the Minister's attitude would deny victims consistent medical or psychotherapeutic attention on which they may be dependent. The Minister's attitude disrupts the continuity and stability of any police or probationary provision to which those involved might have to conform. That attitude also increases dramatically the potential burden on social services departments of councils that are already strapped for cash by Government diktat and, consequently, threatened by rate capping.
The Minister's attitude makes it more likely that a legally separated parent will have to undergo longer periods of isolation from the child awarded in custody to the previous partner. To all intents and purposes, the Minister's attitude imposes practical disfranchisement on young electors who, having registered to vote in their home town, are being condemned to wander until, come election time, they return to vote on some form of Tebbitan bike; they would do better seeking a Tibetan camel.
The matter deserves urgent consideration because 80 people in Middlesbrough alone await the hearing of their appeal against the DHSS refusal of exemption status; the figure for Stockton is not available today. Such appeals could take as long as three or four months and in the meanwhile those people are without financial support. In short, they have been judged, sentenced and executed.
In Cleveland, with 2,500 such cases, we have more than five times the national average. In Stockton, with 650 cases, we have more than four times the national average. All this comes to a head on Friday when those young people are condemned to the roads. There have already been suicides.
We must have a debate, and we must have it today.

Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the visit of the Parliamentary Under-Secretary of State for Health and Social Seurity, the hon. Member for Wycombe (Mr. Whitney), to Cleveland on Thursday last and the views that he expressed on the plight of the young homeless people in Cleveland county.


I listened with great care to what the hon. Gentleman said, but I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10 and I cannot, therefore, submit his application to the House.

BILL PRESENTED

SALE OF ALCOHOLIC BEVERAGES FROM GARAGE PREMISES

Mr. Tony Speller, supported by Mr. Peter Bruinvels, presented a Bill to prohibit the issue of off-licences to retail outlets situated on garage forecourts: And the same was read the First time; and ordered to be read a Second time on Friday 5 July and to be printed. [Bill 170.]

Adjournment Debates

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. On Thursday each week, the Leader of the House comes to the Dispatch Box to answer questions about the business for the following week. Each week a ballot is held for Adjournment debates, and I understand that one of the debates called in the following week is at your discretion.
As you may exercise your discretion, Mr. Speaker, I wonder whether you would be willing to accept requests for Adjournment debates from the Floor of the House. For example, a group of hon. Members might wish to press for a particular debate and ask you, in exercising your discretion, to select a subject for debate in the name of one hon. Member.

Mr. Speaker: Order. It would be very unwise to accept that suggestion. I think that everybody who applies for a debate on every day, including Thursday, feels strongly about a subject. It is left to my discretion to choose which subject is debated on Thursdays.

Opposition Day

[16th Allotted Day]

Skill Needs (Government Policies)

Mr. Barry Sheerman: I beg to move,
That this House condemns the Government's failure to make proper provision for improving the extent and standard of modern skills training that is essential for Britain's economic recovery and industrial growth; deplores the Government's destruction of the nation's training system, including the abolition of industrial training boards, the closure of skillcentres and the catastrophic decline in apprenticeships, and its failure to provide quality training for the new technologies; believes that the present adult training strategy is inadequate; and demands a comprehensive statutory framework to deliver sufficient quality of training to produce the competent and committed work force Britain needs.

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Sheerman: In moving the motion, I am aware that only recently we had a good debate upon the crisis which affects young people. I shall try to keep away from some of the points that I made in that debate, but training for skills in this country is a matter of such importance that you, Mr. Speaker, will perhaps permit me to go back over some of the same territory.
Training is vital for economic recovery and growth and for the future development of industry, commerce and public services. Training builds effectiveness, quality and commitment into that most crucial factor of production, our nation's work force. This proposition ought to be uncontentious. It is accepted by the Government and the Opposition, by key agencies such as the Manpower Services Commission and the National Economic Development Office and by the researchers and policy analysts at the Organisation for Economic Co-operation and Development, the Institute of Manpower Studies and elsewhere; but the increasing turbulence of technology and of the markets and the role of the multinationals in exposing our work forces in different countries to direct competition one with another means that workers will have to train and retrain continually throughout their adult lives.
Training is not a sufficient condition for economic recovery and growth. It alone will not create effective and competitive industry, but it is a necessary condition without which it will be impossible to achieve recovery and growth. As that benchmark for all of us who are interested in training, "Competence and Competition", showed, this is so at the level of our international competitors. Japan, Germany, the United States of America and many other countries have vastly superior systems of education and training. This is linked to their relative economic success compared with ours. Our system produces a fraction of the qualified young people produced by those countries. This lays down attitudes and habits for a lifetime. Our adult participation rate in training is less than half that of our German competitors.
But now we have further evidence from our own country at the level of the company and its policy on training. These are remarkable figures. Against the notional target figure of 2 per cent. of turnover—I hope that the Minister will remember the figure — that companies ought to be spending on training and retraining,

a yardstick that the director of the Manpower Services Commission regards as appropriate, the average private sector firm in this country spends just 0·15 per cent. This is the figure for larger firms which generally do more training. Instead of spending £26 billion, the private sector spends just £1·2 billion. Moreover, as between companies, nine out of 10 of the top performers carried out adult training involving nearly half of their employees, Jut only half of the low performing companies had done any training at all, and, in those that had, less than one in five of the work force was ever involved.
I do not want to give the impression that the education and training system of a country should be geared only to its economic needs and the requirements of industry, but so far as it serves those needs the training system of a nation is one of the essential supports of its economic and industrial system. Until recently there was something of a consensus on this question, built around the employment and training Acts of 1964 and 1973 and the terms of the new training initiative, the NTI. However, the Government have dismembered the system that was built on that consensus which, flawed as it was, none the less provided some of the essential support that training needed. Those supports have been kicked away like so many pit props. Sixteen of the 23 industrial training boards have been abolished. Instead of covering about half the work force, industrial training boards cover now only about one quarter. They were abolished in the name of voluntarism and 100 non-statutory training organisations have grown up to fill the void, but they have become known in the industry as industrial jokes in terms of training.
The apprenticeship system has been allowed to collapse. It used to be the envy of the world and provided a trained and skilled work force not just for this country but for many industries abroad. The apprenticeship system had 150,000 places in 1979, but the number had become about 100,000 in 1984. The number of entrants is down by three quarters. The recruitment level in engineering is down by about 15,000 from the 1970s level—from well over 20,000 to fewer than 8,000. That is a reflection not simply of what has happened in the industrial sectors, which have been ravaged by the recession and the Government's economic policies, but of the Government's deliberate policy, which has been to destroy, attack and undermine the apprenticeship system and to turn off the resources tap, as witnessed by the withdrawal of its Exchequer support.
Many of us will be conscious of the closure of our skillcentres, because 27 of the 87 are to be closed. There will be a loss of at least 3,000 training places, and 1,000 skilled instructors will be sacked for moved elsewhere. Those essential training resources for individuals and local industry have been taken from where they are most needed—the areas of high unemployment. That is, indeed, kicking away the pit props of training. In South Wales, where the mention of pit props is appropriate, there is a feeling of desperation about the level of unemployment, and an even deeper desperation at the knowledge of the pit closures that the Government are forcing on it.
Many local authorities in south Wales are doing their utmost to attract alternative industry to provide a future and hope for their men and women. I recently saw the Islwyn borough brochure. It is an attractive brochure designed to attract people into industry in that area. It describes the advantages of the area. The people and their


quality are rightly given prominence. It gives pride of place to describing the skills that can be acquired at the local skillcentre. It says:
Of particular advantage to incoming and existing industries is the Government skillcentre at Pontllanfraith, Blackwood, which currently has places for 160 persons on various industrial training courses.
That no longer exists because it is one of the skillcentres being closed.
Not even the much bally-hooed retraining of miners through the MSC and the skillcentre training agency will do any good, even though it is a perfectly placed skillcentre to make a contribution in that area. I do not wish to dwell too much on that but that is where the people from Brecon and Radnor would go to obtain their skill training. [Interruption.] Conservative Members laugh. They think that it is amusing, that an unemployed man or woman living in Brecon and Radnor will now have to make a round trip of 80 miles to the skillcentre in Newport. Removing a skillcentre that offers a retraining opportunity for people will mean—

Mr. Jerry Hayes: rose—

Mr. Sheerman: —that people are deprived in a vital part of south Wales, and that is a crime against unemployed people who want a future.
This decision will not do anything for the 2,600 unemployed people in Brecon and Radnor. It could do something for them if the Government had used imagination. The Government could have tried to retrain the 69 people in Brecon and Radnor who have been unemployed for five years, the 63 people who have been unemployed for more than four years, the 179 people who have been unemployed for more than two years and the 1,724 people who have been unemployed for more than a year. That skillcentre would have given those people hope and a future, but they will not have that chance.

The Minister of State, Department of Employment (Mr. Peter Morrison): Does the hon. Gentleman understand that, by arguing the case in that way, he is arguing that we should train fewer people in south Wales, including Brecon and Radnor? Is that what the Opposition want?

Mr. Sheerman: The Minister knows precisely that that is not what I want. I now anticipate his next intervention.
People look at the destruction of our national training system and say, "We do not understand why the Government are doing this. Are they mad?" They are even more puzzled when I tell them that the Government are proud of what they are doing in adult training and when I explain that the Government have reassured us that it is not as we think it is. Let me give the Government's assurances. They say, "The national training system may have been destroyed, but this Government are training more people than before. In fact, they are training twice as many. There are even 50,000 training places on the community programme." That is one of the measures mentioned by the Minister. I go on to explain, "Not only that, but there is a series of programmes — PICKUP open tech, college employer links, local collaborative projects and REPLAN. On top of all this, the Government are mounting a national awareness campaign on the importance of adult training." For most people, their

awareness of adult training has been heightened by nothing so much as the fact that their local skillcentre has been closed or is under threat. The prospect of local unemployed people obtaining high-quality training has plummeted.
The Government's claims are pure humbug. They are a tissue of deceit because, under their schemes, the unemployed will be given only a palliative. They will be given an illusion of training opportunities, short on duration, thin on content and bereft of qualifications at the end.

Mr. Hayes: rose—

Mr. Sheerman: Is it not ironic and astonishing that the criteria for all the schemes that the Government have introduced are that they should be half the price and half the cost of those that they abolish? We cannot have training on the cheap. 
Despite all this, the Government are not mad. Their approach to training is linked inextricably to what passes for their economic and employment strategy. Its features are by now only too familiar. The strategy starts with an idolatory of the market. Its objectives are to be set by employers and its delivery is to be privatised as far as possible. Most crucially, training policies are going to reflect, entrench and police the Government's theory of the dual labour market. The primary labour market consists of those sunrise and other private sector employers that the Government have decided have a future. It is to those companies and their needs that the adult training strategy has been harnessed. However, the bulk of the labour market is to be a secondary labour market, characterised by low wages, low skills and low technology and punctuated by bouts of unemployment so that workers can never become too secure.
Once this key proposition has been grasped, everything else falls into place, despite obfuscation and sweet talking. The Government will not increase resources for adult training, despite the importance that they claim to attach to it. To focus resources on these priority areas, the Government have written off the training needs of the unemployed and of the regions.
However, on the way, the Government have completely abrogated the third objective of the new training initiative, which was their own policy in 1981, and which seemed at the time to be the high water mark of the previous consensus on training strategy. Its terms were to open up widespread opportunities for adults, whether employed, unemployed or returning to work, to acquire, increase or update their skills and knowledge during their working lives. Viewed now, what humbug, what deceit that seems. What was never revealed was the secret codicil to that objective, which reads something like this: "We do not really mean the unemployed at all. As to the rest, there will be opportunities for training only if your employer wants a particular sort of training."
It is hardly surprising that the results of the strategy are beginning to show through in serious skill shortages. Who would have believed, in a country with 4 million or more unemployed people, that we should be suffering from serious skill shortages? With 4 million unemployed, industry is experiencing constraints because of the lack of skilled manpower. That trend has been going on systematically since the middle of 1982. The skill shortages are not just in the high tech areas, although they


are there too. They include machine tool-setter operators, mechanical, maintenance and repair occupations, electricians, carpenters, joiners and sewing machinists.

Mr. Don Dixon: And Cabinet Ministers.

Mr. Sheerman: Indeed.
What may seem extraordinary is the fact that industries that have been decimated by the recession are also experiencing bad skill shortages, including the textile industry. Representing Huddersfield, I know the industry very well. The reasons are there to see. The training infrastructure in textiles, as in many other industries, has collapsed. The industrial training board has gone, and the voluntary training organisations have not filled the gap. The skills of the workers made redundant have either ebbed away during their enforced period of non-use or been abandoned in favour of some other occupation if they are lucky enough to get one. The Government do not seem to recognise the importance of the mutually supportive structures of education, training and industry. Once they are gone, it takes a lot more to revive the infrastructure than hot air from Ministers and the employers' federations to which they listened when they abolished the industrial training boards.

Mr. Hayes: I can understand the hon. Gentleman's concern about skill shortages, about which he speaks with great passion. Does he accept that those shortages are not helped by the grossly irresponsible campaign of the young Socialists who are terrorising young people going on youth training schemes? The hon. Gentleman shakes his head, but I tell him that that is happening. It is happening in my constituency. If the hon. Gentleman does not condemn the actions of the young Socialists who are terrorising young people who are going on YTS, does he accept that he is condemning young people to further bouts of unemployment?

Mr. Sheerman: I shall not give way to the hon. Gentleman again if he continues making such stupid interventions.

Mr. Richard Holt: Does the hon. Gentleman recognise that faults are always on more than one side, and that one of the reasons for skill shortages is the refusal of trade unions to allow enough apprentices to be recruited over the past 15 to 20 years?

Mr. Sheerman: That is nonsense. If the hon. Gentleman had had any acquaintance with or had talked to any of the trade unions, he would know that that is not so.
I should like to refer to the area where one would have expected the Government to do best—high technology. I see that Ministers on the Front Bench have been joined by a Minister with some knowledge of the subject, the Parliamentary Under-Secretary of State for Trade and Industry.
Given the Government's preoccupations and their rhetoric, one would expect them to do best in new technology. It is true that there are initiatives at various levels. Regrettably, all carry the mark of the Government's doctrinaire approach, and so have failed signally to meet their full potential. In schools, the technical and vocational education initiative has been introduced in a way that has caused great divisiveness

between pupils, between schools, and between the education service and the Manpower Services Commission.
The obvious and desirable option of proper curriculum reform to introduce a technical element for all pupils has been ignored. That no doubt partly reflects expenditure restraints and a preference for doing things despite the education service rather than with it. But there is also the question of a dual labour market. Why encourage widespread technical literacy when the majority of young people under this Government's policies have a low tech future?
The information technology centres—the I-techs—were an initiative from the Community that was taken up by the Government. The Opposition supported expansion. But instead of building on that initiative as a permanent Community-based resource that would give access to high tech to all sections of the Community, it has been made subject to the doctrinaire arrangements that dictate short-term contracts for staff and a requirement to make money which will poison the training relationship within those centres and act to the detriment of I-techs in areas of high unemployment.
One wonders where this philosophy will end. Given the Government's philosophy on the closure of skillcentres and the way in which they do not favour I-techs, It seems that if they apply the same logic to the other MSC programmes, even YTS and the community programmes will cease to be available in areas of highest unemployment.
What of technicians and high tech graduates? There have been two reports from the Butcher committee, and an extra £43 million has been pumped into higher education. This is an absolutely classic case of too little, too late. The Government have known for years that there will be needs in the high tech areas, but they spent their time closing down large chunks of the national training system, and they brought some of the most important resources for procucing high tech skills, such as Bradford and Salford universities, to their knees through expenditure cuts.
When they finally woke up, the developing needs for high tech manpower had become a skill shortage crisis, but Ministers still met, wrung their hands and dithered. Finally, they acted by providing less than half of what even the Engineering Council regards as necessary in the desperate situation that we face. There are the self-same private employers to which the Government insists they are paying attention.
Contrast that with the report of the Select Committee on Science and Technology in the other place. That has again provided some of the long-term thinking and undogmatic analysis that this Government so badly need. It rightly criticises the ad hoc approach to the organisation and funding of technological education and training and short-term attitudes to funding. It made 60 comprehensive and far-reaching recommendations which should make the Government feel ashamed of their failure to act decisively and effectively in that area.

Mr. Alan Howarth: Will the hon. Gentleman give way?

Mr. Sheerman: In a moment.
The Government's public relations hopes are always pinned on YTS. Many people had high hopes of YTS,


including the MSC and the TUC. Despite what has been said, the TUC is a prime supporter of any hopeful training initiative. In addition, many thousands of trainers and educationists have put much effort, energy and dedication into trying to give young people a better qualified start in adult working life.

Mr. Richard Tracey: Will the hon. Gentleman give way?

Mr. Sheerman: Not for a moment.
The Opposition wish the second year of YTS well, most particularly for the sake of the hundreds of thousands of young people and their parents who will have no realistic alternative option in the next two or three years until there is a Labour Government. Although I expect the MSC, the TUC and others to produce a good outline scheme for the second year, I have grave fears that most of a two-year YTS will still be little better than the present one-year scheme — which for the most part is merely work experience rather than proper training.
There is a twofold reason for my fears. First, youth training makes sense only in the context of jobs at the end of training, yet the Government's dual labour market approach will consign the vast bulk of YTS graduates to low-tech, low-wage jobs or to unemployment.
A few days ago the Secretary of State for Employment challenged me when I said that only half the YTS graduates were getting jobs. He intervened in my speech and said that I was wrong and that I was misleading the House. He said that the figure was 60 per cent. or more. There was no doubt then who was right, and there is even less doubt now, because two days after his intervention the MSC reported that the figure was 48 per cent. If the Minister can read, he should read that report, which shows that 48 per cent. is the figure.

Mr. Tracey: rose—

Mr. Sheerman: I shall give way only to the Minister if he wishes to say whether 60 per cent. or 48 per cent. is the right figure. He fails to rise. It is precisely because of the number and quality of jobs likely to be available to young people under this Government's policy that there is no real incentive for the Government properly to resource a high quality, two-year YTS.
That is a second part of the tragedy. A two-year YTS as a permanent feature of the education training system is an important and significant change. It ranks with some of the extensions of universal schooling in the 19th century, for it will lay the foundations for the British work force of the 21st century. It cannot, and must not, be done on the cheap, yet that is precisely what the Government have done and are proposing to do.
When YTS was announced three years ago, it was to be a £1 billion scheme. But when the two-year scheme is fully operational, it will cost barely £1 billion, even at 1984–85 prices. I challenge the Minister to dispute the fact that this would have been significantly less than £1 billion at the time when he made the £1 billion claim. I challenge him to come clean and to say just how much less it would be. He does not rise to answer that point.
The Minister is also selling short the adult training strategy, the adult unemployed and youth. His training

strategy does not meet the needs of individuals, women, or black people; nor does it meet the needs of employers or the nation.
The education and training system is part of Labour's long-term social, economic and political objectives. We see it as serving personal and intellectual development and the building of democratic values in a nation rich in creativity, humanity and spirit which has the means to enable people to lead full and satisfying lives. We see it producing the skills and knowledge that are essential to the creation of wealth in working conditions which respect and value the people who create that wealth. We also see the education and training system working towards a better life and a better society. We want to equip people for a genuine economic and political democracy, to eliminate racial and sexual discrimination and to provide real opportunities for people from all walks of life—not only the privileged.
These objectives are closely related. The goals that education and training serve for individuals include the opportunity to contribute effectively to the economy. People's aspirations are bound up with the job that they want to do. Without work and economic security, those aspirations are illusory. It will be impossible to make the economy work for all the people, not just for the profit of a few, unless people have a real stake in a society in which they have work.
Education and training are the means to acquire competence and the skills necessary to contribute to an active and effective democracy both at the place of work and in the community. If workers are to exercise greater control over their lives, to have greater control in the industries of which they are part and to run, and participate in, the management of private and public enterprises, as we believe they should, competence at work is an essential first step. Far more people who can organise work effectively and participate actively in directing the change that our country requires need to be available.
Our training policies will be firmly located in our economic policies. We see training as being linked to the package of investment measures in the infrastructure, construction and industry, which a Labour Government will carry out. The key lesson from "Competence and Competition" and other studies of Britain's training problems is the need to develop a culture of training, and an environment in which training is perceived as natural, useful and desirable for workers who need to acquire many skills during working life. That means breaking the habit of using the school system to filter the academically bright.
To that end, we shall apply a series of co-ordinated measures to initial education and training. The first will be curriculum reform in secondary schools, leading to a common core curriculum, which will be relevant to all pupils and will motivate their participation, and which will include a technical element for all. Secondly, for the post-16-year-olds, the keynote will be a coherent and comprehensive approach. That will include coherence in financial provisions for those studying full time and those engaged in new training. It will include education maintenance allowances for children at 16. It will include coherence in terms of rights to education and training, which will embrace both those in study and on YTS, and those in employment. Coherence will also be extended to methods of learning and its certification and assessment, focusing on outcomes and based on a modular, integrated


system to ease entry and re-entry, and the development of personal profiles of learning and achievement. [Interruption.] I am trying to spell out some of the vital elements of an education and training policy. It is a serious matter and I wish that Conservative Members would listen.

Mr. Tracey: rose—

Mr. Sheerman: I shall not give way. I have taken up enough of the House's time and I shall not allow another intervention.
Although those measures will provide the framework for learning and the encouragement for future learning that the whole of the nation's work force needs, what will motivate the system and the young people who participate in it more than anything will be the knowledge that there are jobs at the end of it. For young people coming through the system, the culture of education and training will be part of their understanding of life and work—it will be natural to learn and to relearn, and in that learning will lie both better performance in work and growth in personal and intellectual development.
In the area of adult education and training our first act will be to restate what has been obvious to everyone, except the Government and some of the short-sighted employers to whom they have listened, since shortly after the war. If the Minister listens to nothing else, I hope that he will listen to this. Voluntarism is not the way to create a culture of training or to produce the quantity and quality of training that industry, commerce and public service need and demand.

The Parliamentary Under-Secretary of State for Employment (Mr. Alan Clark): What about Germany?

Mr. Sheerman: Indeed, what about Germany?
There will have to be a comprehensive statutory framework to bolster and promote the changes in attitudes and values that are required, and to ensure that the short-sightedness of some British employers is not allowed to disable the whole nation. Part of that statutory framework will be the establishment of a comprehensive contributory fund so that there are sufficient resources available for training to be carried out, and sufficient purpose in encouraging the training that most needs to be done. Part of that framework will be the rights of individuals to ensure that they play their part in being alive to the training opportunities that exist, and that they are encouraged to take advantage of them in a positive way. There will also be a specific measure aimed at the level of a firm. A Labour Government will put an end to the futile finger-wagging exercise at industry of the Government in favour of specific measures to encourage a firm to identify its training needs and to meet them. That will include the establishment of training committees with trade union involvement, similar to the health and safety committees. The trade unions know that training is their business, and it is right that they should play a full part. The comprehensive contributory fund will be available to support and encourage the measures that the training committees identify as necessary.
We shall also use the education and training system as a pace setter. That is vital. Skills can lead to productivity and improved performance, particularly when there is an extremely high rate of change. In that, a Labour

Government will build on the pioneering work carried out by Labour local authorities in recent years, despite Government hostility and financial constraints.
The education and training system will also be an important path for tackling the lack of equal opportunities for black people and women. It will be specifically geared to the needs of increased industrial democracy, the development of a significant co-operative sector in the economy, and the talents required for effective municipal enterprise. That is what we believe in. The responsibilities of wealth creation and of improving production and performance are far too important to be left to the owners and managers of British industry. It is up to all working people to take responsibility for production, and taking that responsibility will be the measure of their willingness to share in the control of how that wealth is produced and distributed. The education and training system has a key part to play in equipping them for that role.
In short, the education training system of a Labour Government will embrace the concerns of industry, commerce and public and private services. But the purpose of that embrace will be, not merely to serve the economy as it is presently run, but to change it.

The Minister of State, Department of Employment (Mr. Peter Morrison): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'welcomes the Government's many major initiatives which are producing for the first time coherent industrial and training strategies for the country as a whole, within which employers, in co-operation with others concerned with providing training, can anticipate and meet emerging skill needs.'.
I have listened carefully to the hon. Member for Huddersfield (Mr. Sheerman), just as I listened to what he had to say two weeks ago, but I did not hear anything new. Nor did I hear anything constructive—although, to give him his due, he was more constructive about the youth training scheme this week than he was two weeks ago. Despite the hyberbole towards the end of his speech, I did not hear anything relevant to the problems and needs of today. He talked about training committees, and a comprehensive contributory fund. We know what that means — the heavy hand of bureaucracy. That is precisely what the Opposition want. I assume that the hon. Gentleman was unable to answer my hon. Friends the Member for Langbaurgh (Mr. Holt) and for Harlow (Mr. Hayes) because he could not. The opening speech was just like last week's debate, but, for all that, I welcome the opportunity to debate training again.
I agree with the hon. Gentleman that the underlying theme of "Competence and Competition", and the comparisons that are drawn between ourselves and our American, Japanese and German counterparts, show it to be an important document. All hon. Members could learn many lessons from it. The hon. Gentleman may have seen or heard of a new document produced for the Manpower Services Commission by Industrial Facts and Forecasting Ltd. which is being published this week and is entitled, "Adult Training in Britain". Research was carried out into companies in relation to their training, their profitability, their confidence in terms of their expectation of an improved position, and their expansion in their work forces and output, whether or not they use high technology skills and introduce new products. The research showed


that 24 per cent. of the firms qualified as high performers, 47 per cent. as medium performers, and 29 per cent. as low performers. However—the hon. Gentleman and I may agree on this—there was found to be a high correlation between the amount of training done by firms and their business performance. More than 90 per cent. of the high performers had undertaken adult training, involving nearly 50 per cent. of their employees. Therefore, our objectives remain the same.
Of course, modern skills training is essential for Britain's economic recovery. As we have all learned, bad training equals no jobs in the future, and the pace of change is such that a sound foundation is bound to be needed on which to build further periods of training and retraining during an employee's working life. However — this is where the hon. Gentleman and I disagree completely—unless that training is relevant to the needs of today and tomorrow rather than yesterday, the time and resources spent on it will be wasted; worse, the time and resources spent on outdated training perpetuate manufacturing processes that are not only out of date but uncompetitive in world markets, so leading to lower employment prospects. That outdated training is training for bankruptcy and redundancy, not for profitability and job security.
That is why the Government have always maintained that employers are and will remain the main training providers. However, the Government can — I believe that they do—play an important role as a catalyst and as a pump-primer. Employers will remain the main providers, because they can spot the market demands first. They can then identify the skill needs and, with the Government and the providers of training, they must be in a position to plug the training gap quickly. The chasm—I believe that it was a chasm—that existed between industry and commerce and public providers of training was so wide that it was well nigh impossible to plug it quickly.
I hope that the House agrees that matters have improved, but there is still a considerable distance to go. It is a slow process made slower by vested and conservative interests, which obstruct every attempt to bring the system into the latter part of the 20th century.

Mr. Eric Forth: Is my hon. Friend happy with the extent to which the MSC has consulted businesses in each community, especially in those areas where skillcentres will be closed, to establish precisely their preparedness to provide those training places and the basis on which such training will be provided? I agree with my hon. Friend about placing the emphasis on employers, but is he happy that there is an impetus to fill the gap that will be left by the closure of some skillcentres?

Mr. Morrison: Yes, I am happy. I discussed that point with the chairman of the MSC and with my hon. Friend at some length. The MSC has an important role to play in this regard. Indeed, it fulfils that role extremely well because it brings the provider and the employer much closer together. However, the process is like building a bridge. It takes time to ensure that the foundations are properly installed, but by and large I am happy with the building process.

Mr. John Golding: The Minister said that it is difficult to fill skill shortages quickly by training. Is he aware that many skill shortages arise not because of a lack of training, but because skilled personnel who have been made redundant are reluctant to take up their skills again? The problem is often to attract skilled workers back to their trades.

Mr. Morrison: The hon. Gentleman will appreciate that technology moves on apace. With regard to the personnel to whom he is referring, in many cases a period of updating training is necessary to bring them into the technology of the next decade and the decade after. I was referring to the chasm between the training provider, especially in the public sector, and the employer, which makes it more difficult for the people about whom he and I are worried to obtain that retraining.
My right hon. Friend the Secretary of State for Education and Science has introduced many reforms with regard to training providers in the public sector. My hon. Friend the Under-Secretary of State for Trade and Industry—if he catches your eye, Mr. Deputy Speaker, later in the debate—will highlight what he has done. Among the initiatives that we have taken with the sole objective of bringing the two parts closer together is the technical and vocational education initiative, which we discussed in the House two weeks ago. The hon. Member for Huddersfield belittled it by saying that it was a small pilot scheme without any will behind it. He is wrong. Already, 62 local education authorities are participating in the initiative. The total cost of the programme is about £20 million. In Clwyd local education authority, the initiative is so successful that it has gone, voluntarily, countywide. Yet, as the hon. Gentleman knows, the initiative was resisted initially by many educationalists and by some Labour-controlled — tending to be Left-wing Labour-controlled — local education authorities, which have refused to participate in it. Why do they do that? Why do they deprive their 14 and 15-year-olds of the opportunity of this break?

Mr. Sheerman: The answer to the Minister's question is that the Labour-controlled authorities wish to know when that opportunity and those resources, in terms of capital equipment and teaching, will be available to all children in that age group, rather than only to the favoured few for a trial period.

Mr. Morrison: The hon. Gentleman is arguing that Sheffield and Liverpool authorities are saying, "Here is taxpayers' money available for a group of 14 and 15-year-olds, but we shall deprive you of it because it is not available for all." They say that despite the fact that many will not want it and it is appropriate only for some. Their attitude is quite remarkable.
The hon. Gentleman also referred to the information technology centres, 164 of which are already in operation and about 175 of which will come on stream in the autumn. He did not say that that was a bold initiative which, in many cases, has helped children with less academic records. He did not say that more than 60 per cent. of youngsters who go through the information technology centres go straight into jobs. He did not give the Government the credit for a significant and major initiative.

Mr. Tracey: Will my hon. Friend give way?

Mr. Morrison: I should continue, because the hon. Member for Huddersfield delayed the House for some time and I know that many hon. Members wish to speak.
The hon. Gentleman did not refer to the initiative begun by my right hon. Friend the Secretary of State for Employment with regard to the non-advanced education budget. As he will be aware, in 1985–86, the MSC will spend about £65 million and in 1986–87, it will spend about £110 million. That, coupled with the initiative of my right hon. Friend the Secretary of State for Education and Science — the college-employer links project — will ensure that the training and education in those institutions is much more closely geared to the labour market.
I was not surprised by the fact that the hon. Gentleman did not mention that, last week, the Audit Commission published a report on further education. I suspect that he did not mention it because it talks about value for money and makes the point that colleges should, within the present budget, take about 75,000 more students. The report states that there was much waste in that area. The reason he did not refer to it is simple: those who objected to its publication last week were supporters of the Labour party. The Opposition did not appear to notice that there was a need to change what happened in schools and colleges. Nor have they any desire to do something about it, even when the need for change is pointed out.
As the hon. Gentleman reminded us, two weeks ago we debated at length the youth training scheme. He was a little more fulsome about it today. He knows that I asked the hon. Member for Kingston upon Hull, East (Mr. Prescott) to substantiate remarks that he made about the YTS about three months ago. He said that it was a load of rubbish. I wrote to him once before the debate, and I have written to him since then, but the hon. Gentleman is still unable to produce evidence about any scheme to show that it is rubbish. We still have not received an answer from him. I am pleased that the hon. Member for Huddersfield, who is not today flanked by his hon. Friend the Member for Kingston upon Hull, East, was a little more fulsome in his praise.
The hon. Member for Huddersfield talked about apprenticeships. I wonder how recently Opposition Members have visited a factory. I accept that the number of traditional apprenticeships has dropped substantially, but surely Opposition Members must accept that because of high technology the number of men and women on the line is substantially fewer. The requirement for apprenticeships in the traditional sense must therefore have dropped. The Opposition remain determined to perpetuate the old apprenticeship system which, for all its usefulness in the past, is no longer necessary to the same degree.

Mr. Geoffrey Robinson: We are challenged to say whether we have been round any factories recently. In the west midlands there are many factories which we visit regularly. To what line is the Minister referring on which he sees fewer people, which makes him believe that there is a need for fewer apprenticeships? Is he talking about the toolrooms or engineering support systems, which are as much in need as ever of apprenticeships?

Mr. Morrison: I am amazed that the hon. Member for Coventry North-West (Mr. Robinson) should say that. I am flabbergasted. Has the hon. Gentleman not been round the car plants in the west midlands? Has he not been round

the manufacturing plants there? Does he suggest that with modern technology and machinery the same number of people are required to produce the same, or even six times, the amount? The hon. Gentleman must be blind and deaf if he does not realise that today's needs are different.

Mr. Robinson: Will the hon. Gentleman give way?

Mr. Morrison: I am sorry, but I must get on. The hon. Member will have a chance to reply. I am amazed that he should try to make the same point again.
Apparently, the Opposition want to perpetuate age restrictions, time serving and a system with no agreed standards. If they do, I do not. It would be fair to say that I want to dismantle the apprenticeship system as it is. I want to dismantle that system because I want opportunities for people to join at any age. I want people to be able to achieve certain standards regardless of time served. That is better for the trainees, whatever their age, and it is certainly better for industry and commerce. I want a flexible and relevant system. Both those words are overused, but they are right in this context.
Between 1980 and 1983, the number of apprentices dropped by about 50,000. At the same time, entrants into full-time, non-advanced education rose by about the same number. That reflects a move from craft to technician-based employment in traditional industries. That is the route that we should take.
Apprenticeships led to the belief that training once in a lifetime was sufficient. That is no longer so, as all hon. Members will agree. In the United States, it is said that a period of retraining three or four times in a working life is necessary. That is why we have completely reshaped the adult training strategy.
The hon. Member for Huddersfield mocked the estimate that 250,000 people per annum are to be trained. That is double the number trained originally and it reflects, I regret to say, a genuine need because of the lack of concentration on training during the 1960s and 1970s. That is one of the reasons why unemployment has risen, as the hon. Gentleman will agree.
Doubling the number of people trained is not of itself enough. For too long, we have assumed that training for is own sake is good, whereas training leading to a job is really good. Training for its own sake is no good at all, because that raises hopes which are then dashed. Training is an investment with a return. Training leads to profit. That is the message which I and my right hon. Friends wish to put across to industry—we are already doing that.
I hope that the Opposition, like their trade union colleagues, will help to put across that message, because the adult training campaign which the hon. Member for Huddersfield mocked was launched with the help of all the parties involved. It will take time to change attitudes, but they must be changed. In the four years in which I have been associated with training, attitudes have changed substantially. However, we have not run the whole course. We have still a significant way to go. The Government have a role to play in stimulating and encouraging, and in providing incentives. Through the adult training programme that is precisely what we are doing.
I am talking of the job training scheme—formerly TOPS — occupational training, training for enterprise, access to information technology, local training grants, local consultancy grants, training for special groups and


the wider opportunities training programmes. The Government are making a considerable effort in all those directions.
In addition, we have the open tech, which was launched in 1982, as part of our new training initiative. We lead the field in developing open learning methods. I expect that open learning will become more and more the way of training. That is the way ahead. The system takes training to the trainee. That is simpler than a person having to go to a training establishment. This year distance learning, thanks to the open tech, will benefit about 25,000 people and next year about 50,000 people.

Mr. Michael Colvin: The Opposition have been significantly silent on the open tech initiative. Will my hon. Friend suggest that they go to the Upper Waiting Hall tomorrow when my right hon. Friend the Secretary of State will open an open tech exhibition? The open tech demonstrates the Government's priority in connection with retraining. It will produce the training when and where it is required and make the maximum use of the many under-used training resources.

Mr. Morrison: I am grateful to my hon. Friend for reminding the House that the exhibition will be opened tomorrow. All hon. Members will find it interesting.
We have heard the rhetoric about skillcentres time and time again and we heard it again today. The hon. Member for Huddersfield missed the point about skillcentres. Does he want to perpetuate a system that would result in £50 million a year being spent on courses to which no trainee would go, and on bricks and mortar? That was his argument. The hon. Gentleman believes that any organisation must remain rigid. Because of rationalisation in another 18 months we shall have released £50 million—that is extra training for tens of thousands more people. It is as simple as that.
The hon. Gentleman made a party political point about the by-election in Brecon and Radnor. Therefore, we must assume that the Labour party does not like the idea of mobile instructors going into rural areas—whether in Wales or in any other part of the country. As a result of what we are doing with the skillcentre training agency, training will be brought to those who need it in Brecon and Radnor.

Mr. Sheerman: The Minister knows that cutting highly resourced centres that provide skills training over a period of time cannot be matched by short-term training, whether the capital resources are carried on the back of a bike or in the back of a van. We cannot take computer technology around the country on the back of a bike; we cannot take highly computerised engineering resources around the country on the back of a bike. We must put our money into training. All the schemes that the Minister has mentioned are training on the cheap, and he knows it.

Mr. Morrison: The hon. Gentleman has lost the argument, so there is no point in jumping into rhetoric. He cannot argue with the figures. He seems unable to understand that more people will receive training, and it will be more relevant to obtaining jobs.
On industrial training boards, the hon. Gentleman again used the arguments and rhetoric of the early 1980s. Does he not understand that the 17 industrial training boards that

the Government abolished had lost the support of employers because they had become a dead hand? They were a bureaucratic control, and the net result was that training became a dirty word. I am happy to say that that is no longer the case.
I have outlined some—but not all because time precludes me from doing so—of the enormous training programmes launched during the past five years. Our programmes start in the schools and carry on through working life. They include the open tech and the technical and vocational education initiative, which, among others, are modern and looking forward. The YTS provides a sound foundation. The adult training strategy focuses on the need for continuous updating of training. Hundreds of thousands more people are benefiting, including the unemployed—

Mr. Sheerman: No.

Mr. Morrison: The hon. Gentleman may say, "No," but they are. During the period 1979–80 to now, resources have increased from £458 million to £1,234 million; 353,000 people were being trained five years ago as compared with 643,000 now. That is a substantial increase.
I look forward to seeing whether the hon. Gentleman really does have the support of his colleagues tonight. Only seven Back-Bench Labour Members were present during his speech, yet I gather that this is an Opposition day. We shall see whether he is backed in the Lobby or whether the Government's record on modernisation and constructive reform will not be opposed.

Mr. Ron Leighton: I regret to say that the Minister's speech did not measure up to the seriousness of the situation. It was an extremely complacent exposition of the Government's case in an area in which this country does not do well. I am sure that there is common consent across the parties that Britain has not done well in it for a long time.
The Government are charged with damaging and hindering the position for ideological reasons. [Interruption.] I hope that the Minister is not too complacent to listen to what others have to say. He will no doubt have seen the Labour Market Quarterly Report, published by the Manpower Services Commission, which said:
The picture that emerges is that shortages are spread across all levels from skilled manual to professional, but are more serious at higher levels.
It also says that the problem has been getting worse and is expected to deteriorate during the next year. That is the MSC telling us that, under the regime of the Conservative party, the position will get worse. What is the Government's explanation for that? The Minister, in his avuncular manner, nods his head, smiles and chats to his colleagues. He does not seem very interested.
The report also said that a wide range of occupations were identified—173 in total. Therefore, there are skill shortages in 173 occupations. We do not need a blunderbuss to make us address ourselves to that point. The report cites sewing machinists, electrical and electronic engineers, computer programmers, machine tool setters, scientists, engineers and technicians.
I do not want to quote at length from the report; I hope that the Minister has read it. However, it states:


The information indicates a general decline in training rates over the decade of about 3 percentage points.
Not only is the position bad and getting worse, but projected for the next 10 years it will deteriorate while other countries—our competitors—race ahead. I ask the House whether the Minister's speech measured up to the seriousness of that.
The problem that we face—perhaps based on our culture—is not new. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) and others of my colleagues who served in the Department of Employment know that. The problem was identified in the 1960s, when it was realised that voluntarism was not the full answer because it did not work. It was necessary to have the carrot and the stick. Private firms had to be encouraged and guided, so Parliament established industrial training boards. They have now been abolished. In fact, the Minister — I almost said the vandal — was instrumental in that. He did not know much about industrial training boards in those days—

Mr. Peter Morrison: I do now.

Mr. Leighton: I do not hold against the Minister the fact that he did not know much about them in those days. Indeed, I served in Standing Committee with him when we discussed these matters. The Government gave him instructions to abolish the training boards. So what do we have now? The simple truth is that we go back to the 1960s, when we learned that there were not enough volunteers in British industry.
The most recent survey of British firms found that, what confronted with skill shortages and asked what they would do about them, they said, "We propose to recruit, not train." In other words, they proposed to poach people who had been trained by others. I ask the Minister—before he is moved from his present position—to think of how we can improve matters. Perhaps he could think of some tax reliefs for firms hoping to spend money on training. The taxpayer could match their investment pound for pound. Perhaps the Minister will make a note of that for the future. I ask him to think of ways to encourage private firms to train.
The skillcentre training agency was an integral part of the training division of the MSC; it was not shown separately in its accounts. It was cut adrift and told—I suppose on monetarist and ideological grounds—to sell its products in the market place and became self-financing in three years. That was unrealistic. After all, the training division had been its sole customer.
The training division found that it could get cheaper places elsewhere, primarily in colleges of further education. The labour costs in the skillcentres were half those of colleges of further education. We hear a lot about people pricing themselves into jobs. Those who taught in skillcentres charged only half what was charged by lecturers in colleges of further education. Despite that, they were given the sack. That seems a strange way of getting people to price themselves into jobs.
Although the labour cost of lecturers at skillcentres was about 50 per cent. of the cost of their counterparts in colleges of further education, when the service was delivered to the public it was 50 per cent. dearer. The reason for that lay in the accounting system, in that it did not compare like with like. The places at colleges of further education were priced on the basis of marginal costs, although their overheads were paid for by local

education authorities. The skillcentre places were, by comparison, unrealistically priced because of their heavy overheads.
The MSC stated that, without the closures, there would be a loss of £52 million by 1987–88. When the Select Committee had the matter investigated by a specialist adviser, we found that that was not the true figure and that the cost would have been £12 million.

Mr. Kenneth Carlisle: The hon. Gentleman should also consider the effectiveness of skillcentres. The skillcentre for Lincoln, for example, was in another county many miles away, at Long Eaton. As a result, few people from Lincoln who wanted training could get there. Now that that has been closed, the number of training places where we need them, in Lincoln, is being doubled. More people will therefore take up those training places, which will become more cost-effective.

Mr. Leighton: I am happy to think that that will be the situation in Lincoln. I want more training places throughout the country. If we want to expand training, why sack hundreds of skilled trainers and put them on the dole? I want an expansion of the system in the hon. Gentleman's constituency and elsewhere, and in that process I do not want any centres to be closed. If it is said that skillcentres are offering the wrong products at the wrong prices in the wrong areas, let us have them supplying the right products in the right places. We want a general expansion of training.

Dr. Norman A. Godman: One of the most important skills required in the offshore construction industry is welding. The skillcentre in Govan, and at the James Watt college in my constituency, provide marvellous instruction in that and other skills. I speak from experience. My hon. Friend is right to say that the centres have an important role to play.

Mr. Leighton: Given the heavy overheads of skillcentres, they are likely always to be at a cost disadvantage compared with colleges of further education, which have their core costs met by others. If only market forces are to rule, with the sort of book-keeping that is undertaken in this sphere, few skillcentres will survive.
A heavy responsibility rests on the training division as the main customer of the skillcentre training agency. Does the Minister agree that the MSC and the Government have said that they regard the retention of the new network of skillcentres as being in the national interest, that it is the minimum necessary and that the present network will be retained for the future?

Mr. Peter Morrison: I am grateful to the hon. Gentleman for reminding the House of what the chairman of the MSC said in the Select Committee, the point that the hon. Gentleman has reiterated. The training division's total obligation is to ensure the right training of the right quality at the right cost to maximise the number of people who can be trained in jobs or skills in which they are most likely to get employment. Does the hon. Gentleman agree that that is the right approach?

Mr. Leighton: Yes, but I remind the Minister that we were told by the Secretary of State that a national network of skillcentres was essential as a pace setter or benchmark of quality. He gave a number of criteria to show that it was essential to have such a network and we were told that the reduced network was the minimum necessary.
That being so, a great responsibility rests on the training division to understand the needs of the skillcentre training agency. The cost of shutting down a third of the skillcentre network is £12 million. In other words, the Government are paying that to shut them down. I do not know whether that is generally appreciated.
The Minister may not like my saying that, in relation to the YTS, many people believe that the motives of the Government are suspect. They fear that the Government are using it as a device to get people off the register, to keep people off the streets and out of trouble and to promote cheap labour. Many people regard the YTS as a cosmetic.
I hope that when the Government consider the second year of YTS they will take careful note of what youngsters are saying. It is no good the Government saying, "We know better than you." It is a voluntary scheme—that is the way we work in Britain—and it is not good enough for the Government to claim, "We have a parliamentary majority, so what we say goes."

Mr. Andrew Rowe: Will the hon. Gentleman confirm that, in the considerable time that he and I have been members of the Select Committee, we have had witnesses before us from the TUC and a wide range of bodies and that—with the exception of one, who totally failed to produce the evidence that he claimed would show that people thought that the schemes were no good—the evidence that we have consistently received has shown that the suspicion with which the YTS may have been regarded is diminishing rather than increasing?

Mr. Leighton: There is a lot of good will for the idea of a proper high-quality youth training scheme. The Labour party has been advocating a two-year youth training scheme and the Trades Union Congress supports a two-year scheme. The TUC is a part of the Manpower Services Commission and is giving great support to a two-year YTS, so I concur with what the hon. Gentleman has said. Despite all that, many people doubt the Government's motives. Therefore, the Government have a responsibility to remove that doubt. Nobody knows what the two-year scheme will offer young people. I do not know whether the Minister of State is listening to me or to his colleague, the Under-Secretary of State for Trade and Industry, who has great knowledge of skillcentres. I hope that the Minister will listen to the debate. We do not want more of the same or twice what we have now.
The credibility of the YTS will depend on whether there is a job at the end of it. We are told—perhaps the Minister of State will confirm this—that the most recent figures show that the number of trainees who get a job at the end of the scheme is diminishing. My hon. Friend the Member for Huddersfield (Mr. Sheerman) said that half, or less than half, of those on the scheme obtained a job. We now understand that less than half of those on a scheme get a job at the end of it.
The youth training scheme must be of high quality and the second year must be an upgrading year that builds upon that achieved in the first year. There is very little evidence that it will be a better scheme. No one knows what it will be. There is really no such thing as the youth training scheme. There are a number of different schemes that are voluntary. We must listen to the CBI and the employers. The cash made available by the Government for the

scheme is roughly £1 billion, the amount that they originally set for one year. Now they want two years of YTS at £1 billion. Is it possible to have a high-quality two-year scheme for £1 billion? I do not think it can be done, and the employers I have met do not believe that it is possible.
On the day that the White Paper was published, the CBI told the Select Committee that it was anxious about it. The Ford Motor Company said that it was not prepared to put in any more money, and it had one of the better schemes.
Many trainees do not stay in the YTS for the full year, so will they stay for two years? What will they do for two years? No one has given any sign of what they are to do for the second year. If the Minister of State can give any clear guidance I shall be pleased to hear it.
Those who suspect the Government's motives see the YTS as a cheap-labour scheme. If the allowance was still indexed to inflation, in the first year it would be £34, but it is now only £26·25. If the Government want to protect themselves from the charge that the YTS is a cheap-labour scheme, especially in the second year, they will have to increase the amount of the allowance. I hope that they will understand that that comment is made by someone who wants a decent credible youth training scheme and does not believe that the YTS should be abolished.

Mr. David Madel: I do not agree with most of the rhetoric from the Opposition Benches but I think that the Opposition have chosen an appropriate subject at an appropriate time as we are about to embark on the public expenditure review for 1986–87. Much of what has been said has been an attempt to persuade the Government to alter their priorities on spending and, therefore, education, training and updating skills are extremely relevant issues. Those of us now sitting on the Government Benches recognise that as a major challenge to the Government to ensure that as the new jobs appear the appropriate skill training is available for those who are seeking new jobs.
I welcome the part played by the Open university in providing fresh opportunities, especially for the adult unemployed, for learning new skills. I welcome also the support that the MSC is giving to adult training courses. In my view, there will be widespread support for the recent creation of a new standing committee on continuing education. By bringing in the Open university and other further and higher education institutions, that committee will be able to provide new practical schemes which will enable people to acquire new skills. This new body will be able to learn much from the welcome growth in many part-time courses in polytechnics that we have seen in the past two to three years.
There are two points that I want to make about the role of schools in the teaching of new skills. There has been enormous and welcome popularity and support for the Government's introduction of TVEI because of its enrichment of the curriculum and because of what it is doing to help young people to get jobs. However, the equipment used is expensive to acquire and is expensive to maintain. It is much-used equipment. I hope that proper account has been taken of the need to maintain the equipment in the budgeting, financing and planning of TVEI. It will be useless unless it is properly maintained. It should be recognised also that the cost of maintaining it is increasing all the time.
The second year of the YTS is very much unknown territory. Given the growth of further education and the improvement generally in higher and further education, young people may want to use the second year of YTS to return to full-time further education. There is a problem for the Government, as it is not clear what system of student financial support will be available for a young person if he leaves YTS in the second year to go into non-advanced further education or another form of further education and his local education authority is not obliged to supply a mandatory award. There is thus a gap in our student financial support provision. We shall soon have the Green Paper on student finance and grants and in my view it will have to take up that issue, especially as we are moving into the two-year YTS.
The way in which the Government fund research has a direct relevance to skill training. We are rightly concerned to see much more innovation from small firms whereby we encourage the talented to exploit their ideas through the growth of small firms. One of the reasons why the United States has seen such a surge in its economy through the growth of small firms is that a proportion of federal Government research funding always goes to small firms and small businesses. That is something that we should copy quickly.
I welcome the recent Government announcement that an additional £4 million is being provided for nine key university research groups to support research of international standing and industrial promise. However, it is public expenditure review time and I want to highlight two of the statements made by the recent report of the Advisory Board on Research Councils to the Government on science and public expenditure in the next two years. The board made two statements which cause me to worry. First, it said:
large new facilities with the Science and Engineering Research Council cannot be exploited fully because the Council cannot afford the necessary instrumentation.
Secondly, it pointed out that the
Natural Environment Research Council does not have the resources to fund full UK participation in the Ocean Drilling Programme, of fundamental importance to advances in knowledge of plate tectonics and mineralisation".
The Government have time to make alterations. The report has to be considered by the Government and action can be taken in the autumn, when the public expenditure for 1986–87 has been agreed. The matters referred to by the advisory board need urgent attention because of their relevance to our efforts to improve skill training and increase employment. I am sure that the Government, in their spending review in the autumn, will want to take additional practical steps to accelerate economic activity, and above all to improve our research base, thereby helping to reduce unemployment.
Our aims with regard to learning new skills and updating skills will not be properly achieved unless there is peace and stability in the classroom. It does not exist at present, with deadlock in the teachers' pay dispute and classroom disruption happening in various parts of the country. I praise the Government for what they have achieved in obtaining greater co-operation between education and industry. As that co-operation increases, the teacher trade unions should look to industry for management advice and expertise in helping to create a new salary structure which will properly reward effective and dedicated teaching.
The debate has been about skills and employment. It is time to show some industrial relations skill in the education service, so that the dispute may be brought to an end quickly, and a phased salary offer, coupled with a new salary structure, can allow the education service to prepare young people for working life and enable them to take advantage of the rapidly growing new industries with new job opportunities.

Mr. David Penhaligon: I welcome an opportune debate and congratulate the Opposition on raising it.
The issue of skills in Britain has a far wider effect on the nation that has been indicated in the speeches so far. I am by training an engineer and therefore aware that, even during the boom periods of the nation in the 1950s and 1960s, what Britain made was not a reflection of what we were capable of making but rather a reflection of the skills that were available to industry. In addition, many of the ways in which things were made were also a reflection of the skills available to industry.
It is interesting to consider who was to blame. I do not believe that the unions helped, with their restrictive practices, although I admit that I agreed with and enjoyed much of what the hon. Member for Newham, North-East (Mr. Leighton) said as a representative of one of the print unions. There was a degree of irony in his speech, because the print unions have probably done more than any other unions to oppose innovation, new technology and new working methods. They are the classic example of much of what is wrong with Britain and of the mire in which we find ourselves.

Mr. Leighton: I often hear that said, but is the hon. Gentleman aware that last year the printing unions and the British Federation of Master Printers reached a comprehensive agreement on training, and that there is complete harmony in the industry on training matters? Indeed, it is one of the few good examples in British industry of agreement on training between employers and trade unions.

Mr. Penhaligon: It is true that there is some willingness to allow training so that people can work the antiquated machinery that dominates much of the printing industry. What is required is training for the new technologies and an open-armed, welcoming approach to allowing it to be incorporated into our production system. I say that in the belief that one of the great duties of this House is to improve the living standards of people who work with machines.
It would be foolish to think that the blame lies only with the unions. When we consider our great industrial background and our role in the industrial revolution which transformed the world, it is extraordinary that we seem to live in an anti-technology nation. In the local sixth forms and colleges, where the brightest young people in a town or city are to be found, how many of them want to make something or grow something? Very few of them want to do that. That is not so in Switzerland, West Germany and France, where a reasonable percentage of the best and most able young people see their future in making or growing things, and look forward to such careers with enthusiasm and dedication.
To the extent that skill acquisition is now a political issue in Britain, I welcome the change of mind, because


it is high time that we set to work to change attitudes. Much of our wealth-producing sector was based on low and medium technologies. We produced items that others could make, and that others made with a little higher productivity and slightly lower wages. In that way they undermined much of our economy. We have lost enormous swathes of our markets in the past few years. We lost them more rapidly than was necessary because of much of the Government's economic policy, but it could well be argued that we would have lost many of those markets in any event.
In debates such as this we tend to talk about training and jobs as though they were totally different entities. Although they are not the same, the two are closely connected. Suppose that by some miracle every person in Britain tomorrow could have a job. The current levels of skill and tuition would be inadequate to enable that position to be maintained for very long. Training is not an alternative to unemployment; it is a part of employment, and the nation's prosperity depends on it. We must begin to regard training in that light.
The youth training scheme has considerable potential. It is often referred to as a uniquely British idea, but it has been copied from other countries. It is none the worse for that, and I welcome the fact that we are now learning from the experience of other countries. I am, however, a little concerned about the content of the training schemes. In many communities training is often depicted as something that young people should do if they have failed to get a job. It is regarded almost as a sort of punishment. That is not how we want to see the YPS develop. It must be seen and believed by communities to be a sensible alternative to immediate employment, enabling young people eventually to enter the employment market at higher levels of skill, for which they will receive higher levels of reward.
To some extent I agree with the Government that the people who are most likely to know where training is most required are employers. After 10 years in this House, I have a shade more faith in the employers' choice than in that of any Secretary of State.
Employers are not forced to put anything like the resources into training that are manifestly required. The hon. Member for Huddersfield (Mr. Sheerman) said that employers should be spending £26 billion a year on training—that sounds like a figure plucked from the air and a shade higher than my guess. But to put it bluntly, employers are not spending enough and I believe that we should use legislation to force employers to pay their fair share and to make an active contribution towards training. If it could be demonstrated that the voluntary sector is producing the goods, well and good. But I see little that makes me believe that, when training is voluntary, the employer provides anything like the quantity that is required.
Skillcentres are not tablets of stone, nor is there any reason why skillcentres should be used indefinitely as part of the training scene. However, they work. If one goes to any constituency and talks to people about their lives, jobs and living standards, they point to the local training centre as a great turning point in their lives. Such centres enable them to obtain substantial skills which they are able to put to good use for themselves and their employers. This is precisely what is required—skills that are good for the individual and employers.
Some of the changes that the Government have made do not make sense to me. The situation in south Wales, not surprisingly, has been mentioned today, but there are other areas where there are problems of similar magnitude. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) has said that many of his constituents have to travel 25 miles to the present training centre, at Killingworth, but it is to be closed, so the nearest will be 55 miles away. Even the most optimistic rural traveller, used to travelling further than urban dwellers, knows that 50 miles there and back puts an end to training on a day-to-day basis. That is the scrapping of the skillcentre and a local resource.
I do not say that every skillcentre should be maintained for ever but much of what the Government are doing worries me. I see the excellence of one section of our training being greatly reduced, but for what purpose? Clearly, it is to release a little money to offer a little training for a lot. I must tell the Government that offering a little training to a lot or offering a lot of training for a few are not acceptable alternatives. One way or the other, we must find the resources to manage both.
Other equally crazy examples are not difficult to discover. Plymouth runs a computer training course which my constituents are desperately keen to get on. However, to get on the course — there are none in Cornwall — Plymouth has to declare that it can find no one in Plymouth who wants to do the course. Therefore, if nobody in Plymouth wished to do the course, the droppings are offered to my constituents. That is crazy. There is no quality, no quantity and no analysis of who can use the course best. The centre is in Plymouth, so Plymouth people have first dab, and the Cornish are left out. I am sure that the same is true throughout the country.
We are told that in future there will be no list of applicants and no analysis of applicants. Courses will be stuck up on the board and the lucky person on his lucky day who wanders in and grabs the card off the wall before someone else will get the training. The Minister should talk to the chairman of the Manpower Services Commission and ask what logic there is in such a system. I know why the system exists—it appears marginally to reduce administration costs.
We are back to spoiling the ship for a ha'porth of tar. I suspect that the Minister agrees. He believes that we must improve training, and he works hard to that end, but we do not get the impression that the same is true of the whole Government. I am sure that one reason why the Government have devoted more, but still meagre, resources to the youth training scheme is their desire to reduce the unemployment figures. There is nothing wrong with the desire, but there are other reasons for improving training.
Unless Britain gets its attitude to skill acquisition and training right in the next 10 to 15 years the decline in our basic wealth production will continue and Britain's economic outlook will be very poor.

Mr. John Watts: A debate on youth training nearly two years ago provided the occasion for my maiden speech. I chose that debate because I take an interest in the subject, and it was of great interest in my constituency.
Last month, unemployment was 6·8 per cent., or 4,631 people. In that month, 663 vacancies were notified to my local job centre, and there was a stock of 679 vacancies


at the end of the month. On the assumption, which I think is valid, that only about one third of vacancies are notifed, the pool is likely to be between 2,000 and 2,500.
By national standards, Slough has a relatively small unemployment problem, although it is just as tragic for the unemployed in Slough as it is for the unemployed in the constituency of my hon. Friend the Member for Langbaurgh (Mr. Holt). Slough has not so much an unemployment problem as an employment problem which is typified by a chronic shortage of skilled labour. I have visited about 50 companies in my two years as a Member of Parliament and spoken to the managers of many more, especially at meetings of chambers of commerce. All tell me that the major curb to expansion now is shortage of skilled labour. That curb on job creation has spin-offs in other parts of the country.
Slough is at the eastern end of the Thames valley and has recently been dubbed silicon valley because of the increasing representation of computer and information technology companies in the Thames valley corridor. However, that is only part of the picture.
Although an increasing number of computer and information technology companies have moved into my constituency in the past few years, the traditional character of Slough as a centre for the engineering industry remains relevant. There are just as many shortages in the more traditional skills as there are in the new glamour industries.
Some of the problems of the engineering industry were highlighted in a recent Thames Television programme that featured one of the many companies that permanently have a substantial number of vacancies for skilled engineers. I visited my local jobcentre recently and asked the manager, "We often hear about the hard-core unemployed, but can you tell me anything about the hard-core vacancies? How many vacancies stay on your books from month to month?" We were unable to arrive at a precise figure, but he was able to tell me that there is a large unsatisfied demand for skilled engineers. One wonders why such vacancies remain unfilled when the problem of unemployment is on everyone's lips.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) mentioned the reluctance of some people to return to their original trade after they have had to leave it. It is part of the local perception in my community that people who left the engineering industry in the depths of the recession and obtained other jobs, at Heathrow airport for example, which are not skilled but have the same rates of pay, are reluctant to move back to the jobs for which they were trained.
There are obstacles to mobility. Because of Slough's relative prosperity, housing costs are high. Slough's major expansion, which started in the 1930s, was facilitated by importing skills from other parts of the country. That is no longer an option for many companies because of the barrier which housing costs create. No one can be expected to sell a house for £15,000 or £20,000 in the north of England and take a job in Slough, where perhaps an equivalent property would cost £40,000 or more.
There are structural features of immobility, such as the impact of our social security system. Immobility is created by the comparison between drawing benefit and drawing wages. I believe that the Secretary of State's review of the system will help to overcome some of those problems.
Surely some of the 4,600 or so people registered as unemployed in my constituency have skills that are in demand. They cannot all be unskilled and unsuited to the jobs that are available.
Another problem is that we have little or no information about the skills and experience of those on the unemployment register. Such information might be of little more than academic interest in an area where job seekers vastly outnumber vacancies, but in places such as Slough, where unemployment is relatively low and skill shortages are severe, there could be value in having such information available.
If a local employer contacts the Slough jobcentre and says that he has, say, 10 vacancies for capstan lathe operators, although the official statistics may show that 4,600 people in Slough are supposedly looking for work, it is not possible for the jobcentre to put the employer in touch with a single person who holds himself out as having that skill. The information simply does not exist.
As a practical step towards meeting the skill shortage that faces many companies in my constituency, Ministers should look again at the decision no longer to require the unemployed to register at jobcentres. We need to gather information about the skills and experience of the unemployed if we are to make good use of the reservoir of skill and experience which must exist in every constituency.
Slough has relatively low unemployment, but severe skill shortages. It would be a good place to restart gathering information.

Mr. Peter Morrison: Anyone who wishes to register at a jobcentre is entitled to do so, and it is in order for him or her to state precisely any details of previous skills and experience. Officials at the jobcentre will endeavour to match those skills with employers' needs.

Mr. Watts: I know that there are voluntary arrangements — the manager and staff of my local jobcentre undertake that task enthusiastically when requested to do so — but we need more structured information so that we can match skills to vacancies and identify the potential for retraining to meet skill shortages.
I suspect that there is not a close match between the skills that are in short supply and the experience and skills of the unemployed. Otherwise, there would be more initiative from the unemployed in finding jobs. I suspect that, with a little retraining to facilitate people building on an old skill, there would be considerable potential for them to move into new jobs requiring different skills, but ones for which they could be trained.
Slough is lucky to have a go-ahead chamber of commerce and industry, which has taken a leading role locally in the youth training scheme. We have 360 young people in training, and 350 local companies have participated in the scheme in the past two and a half years.
We have heard from the Opposition depressing statistics about the YTS. I can speak only for Slough, but 90 per cent. of trainees are retained in full-time employment at the completion of their courses by the company that provided them with the training. An even higher proportion get jobs. Local companies have seized on the YTS as a golden opportunity to train people to meet skill shortages.
The local chamber of commerce and industry, sponsored by the Manpower Services Commission and the


Department of Education and Science, and in collaboration with the local further education colleges, is investigating skill shortages and training needs throughout east Berkshire. I do not suggest that we should have endless investigations, but I hope that this is not a one-off exercise. I am suggesting that there could be a much greater role for chambers of commerce and industry. They could be involved in both identifying local skill shortages and co-ordinating the required training. The hon. Member for Truro (Mr. Penhaligon) said that he had more faith in employers than in the Secretary of State identifying training needs. To use a different comparison, I have more faith in the ability of a good chamber of commerce and industry to identify the training needs of its member companies than I have in the Manpower Services Commission. Therefore, I should prefer far more of the funding made available by the Government for training to be routed through chambers of commerce and industry.
That is the way in which training is carried out in Germany, which has been held out to us as a shining example of how training should be organised. I had the opportunity to visit Germany last year to study vocational training there. Success in Germany is based not upon the investment of vast sums of taxpayers' money but upon investment in training by industry. It is common for the chambers of commerce and industry in Germany to play a leading role in both setting the standards and monitoring the performance of those who are being trained.
One reason why industry in Germany has been able to afford to maintain a massive training programme throughout the recession—this year German industry has provided 800,000 new training places for school leavers—lies in the sensible attitude towards the remuneration of trainees by both sides of industry. Whereas in this country apprentice pay rates have recently been about 60 per cent. of adult rates, in Germany the typical range is between 20 and 30 per cent. of adult rates. Over the years, trade unions in this country have succeeded in forcing up the rates of pay for apprentices to completely unrealistic levels. Consequently, they have succeeded in eliminating the training of apprentices throughout most of British industry. It is against that background—[Interruption.] Does the hon. Member for Huddersfield (Mr. Sheerman) wish to intervene?

Mr. Sheerman: It is not worthy of an intervention.

Mr. Watts: I could have made very much the same comment about the majority of the hon. Gentleman's opening speech, but I heard him muttering on the Front Bench and thought that he might wish to intervene. Clearly he does not wish to do so; he prefers just to mutter.
It was against that background that it became necessary for taxpayers' money to be injected in order to establish the youth training scheme. The Government are right, however, to insist that there must be a much bigger contribution from industry to the extended youth training scheme that was announced in the Budget speech.
I do not believe that skill shortages will be solved by throwing taxpayers' money at the problem, which seems to be the only solution of the Labour party; nor do I believe, in the words of the Opposition motion, that "a comprehensive statutory framework" will deliver the skills that the country needs. Nothing seems to me to be less like a recipe for success than a statutory framework. A major

change in attitudes is needed. Our young people need to recognise that the long-term value of sound training is more important than a few extra pounds in their pockets during the early years of their working lives.
Industry needs to recognise far more clearly than it has in the past that training is an investment, not an overhead, and that the responsibility for providing training rests with each business, not just with its competitors. It is not good enough to rely upon somebody else to train and then hope to be able to poach in sufficient numbers to meet one's needs. I agree with the hon. Member for Newham, North-East (Mr. Leighton) who made that point. The trade unions need to recognise that the contribution to overheads, let alone to profit, of trainees in their early years is negligible and that this should be reflected in the rates of pay for trainees.
The hon. Member for Newham, North-East referred to the youth training scheme allowances and the suspicion that this scheme is designed to provide cheap labour. That is not the reality. The allowance rates are a recognition of the work that is done in the early years of training. The time for bigger reward comes later, when the training has been completed and experience has been obtained.
Anybody who listened to the speeches of Opposition Members and who was ignorant of the facts could be forgiven for believing that until May 1979 Britain had a comprehensive system of vocational training which was then destroyed by a callous and indifferent Government. The Opposition motion refers to
the Government's destruction of the nation's training system".
Yet anybody who looks at the facts sees that the reality is very different. The Labour Government introduced the youth opportunities scheme. That was mainly a cosmetic measure—an allegation that was subsequently thrown at the youth training scheme, but with very little justice. That cosmetic measure has been replaced by YTS. It is the first attempt ever in this country to provide school leavers with relevant work-related training.

Mr. Sheerman: Will the hon. Gentleman give way?

Mr. Watts: No. I offered to give way earlier to the hon. Gentleman. Many of my hon. Friends wish to contribute to the debate, so I shall not give way now.
The industrial training boards were a costly bureaucratic money-go-round. The name of the game was to see whether one could load overheads upon one's training budget and then recover more out of grant than one had to pay through levy. It had very little to do with the provision of training. Apprenticeship schemes were made cripplingly expensive for employers by trade unions forcing up rates of pay, just as the Opposition would like to do with the youth training scheme.
This Government have produced the first coherent training strategy that this country has ever had. In partnership with industry, this strategy will, I believe, meet the skill needs that are so vital to my constituency and to the future industrial success and economic growth of this country.

Mr. John Golding: Tory Ministers dealing with skills and training are, in my view, amiable but incompetent and gullible. They are gullible because they have been taken in by the employers. In his Budget speech the Chancellor said:


too many employers still fail to recognise that training is an investment in their own commercial interest. This is in marked contrast to our major competitors overseas." — [Official Report, 19 March 1985; Vol. 75, c. 792.]
Both those statements could be wrong.
I say to my own Front Bench that it should not believe that training is always in the interests of the employer. I was a joint Under-Secretary of State in the Department of Employment before 1979. A problem that we constantly faced was that workers who were trained by one industry were then poached by another. Lorry drivers are a very good example. Heavy goods vehicle operators accept that, having paid for training somebody, others then poach those they have trained. Training is not necessarily a good investment. The Chancellor's statement is true if one refers to Britain in general, but in the case of each employer it is not necessarily true. It is cheaper and better for one's shareholders not to train if somebody else is carrying out training and if it is possible to poach those workers at the end of their training.
Ministers are gullible because they believed employers who said that they would do a far better job than the industrial training boards. There is no evidence for that. They have done worse. However, Ministers believed the employers when they asked to be freed from the industrial training boards so that they could provide the training. The result is that we have the pathetic sight of the Under-Secretary of State for Trade and Industry ticking off the employers because they are not doing the job that they promised they would do. Employers are being begged to do that job and they are being threatened if they do not do it. Mr. Deputy Speaker, would you be frightened by the Under-Secretary of State who is sitting on the Front Bench now? Would you part with your shareholders' money if the Minister was sent to tick you off?
Of course you would not. The Minister of State goes around the country chiding employers for not training. The employers smile and enjoy the speech. They are amiable, and they share a gin and tonic at the end of the meeting. They then go their respective ways and no training takes place.
I do not believe that Ministers are callous and indifferent. They are amiable, incompetent and gullible and the country suffers from the gullibility. I asked the Minister of State a serious question about skill shortage, and he did not seem to grasp the point. The Minister of State contradicted me and the Secretary of State nodded in agreement with me.
Everyone knows that one of the reasons for the present skill shortage is that people who have used their skills for 20, 25 and even 30 years and been declared redundant, have found more secure jobs perhaps as postmen or milkmen. They have grown to like the independence of that job and because they no longer face redundancy, they stay in that job. As a result, a semi-skilled or unskilled person who could be trained as a postman or milkman is kept out of a job, and we are short of a skilled worker.
When I was in the Department of Employment I was appalled at the waste of skill. We had no policy to cope with that wastage. The Chancellor has compared this country with Japan, but great differences exist between us. The Japanese have lifetime security in a firm. That security has two effects. First, because there is little mobility between firms, it is worth while for a company to invest money in a youngster and subsequently throughout his adult working life, because the company

knows that its investment will be repaid. After all that training the individual will not disappear. Secondly, it is worth while for the individual to accept that training because he or she knows that the job is secure.
Hon. Members should not think that the answer to skill shortage is simply further training. It is pointless to continue training if the trainees will not use their skills I must however modify that statement. I disagree strongly with my hon. Friends, the Chairman of the Select Committee and the Minister when they say that training is only worth while if there is a job to go to.
When I was in the Department of Employment I saw hundreds of young people in training who would otherwise have been on the streets. I defend training for training's sake, if the alternative is for the young people to do nothing. Apprentice training is not only about teaching a youngster to use or maintain equipment; it is about giving youngsters dignity, self-respect, status and a position in society. Industrial training is as important to the individual as it is to the employer.
We heard a lot of claptrap from the Minister about training for the new technologies. He said that we should forget the traditional apprenticeships and concentrate on the new technologies. I tabled early-day motion 574 to draw attention to the fact that only 32 apprentices are to be recruited this year by British Telecom, London, which has an engineering work force of over 27,000. It is a highly profitable company engaged in high technology with an expanding market. I was shattered when I realised that British Telecom was cutting its apprentice recruitment. We are not talking about the traditional apprenticeships that the Amalgamated Union of Engineering Workers proudly controlled for a century or more. We are talking about modern apprenticeships in a modern technological industry. BT has decided to cut recruitment of apprentices in this important company because it is responsible to private shareholders now and not to the public good.
The Minister of State is not present but when he returns the Under-Secretary can tell him that I have not been to a telephone exchange for at least a fortnight. I say that because the Minister of State chided the Opposition Front Bench for not visiting factories.
What BT is doing for training is an illustration of what is happening elsewhere. The Minister of State talks about modernising training. BT's attitude is to stop training engineers in the complete system and to teach them only what they need to know to do the job in hand. Its training philosophy has retreated centuries. For a long time BT took great pride in its training. That pride was shared by trade unions and management. Entry was not restricted. Training at all levels and ages was accepted.
Management is now saying that it will not train in systems so that trainees can understand all the work, or in a way that will enable them to adapt in the future. It is training people to perform some industrial tasks only. That is not good enough. BT has been cutting its regional training schools. I understand that its Kew training school is closing. BT prefers to issue glossy periodicals, to spend money on useless advertisements and to reduce consumer relations training. It does not make sense. It accords, however, with management thinking in British private industrial companies. I understand that the training of clerks is also being restricted.
The MSC's "Labour Market Trends: Midland Region" assessment is a devastating report for anyone who has the interests of British industry at heart. It talks about the vast


need for training. It refers to upgrading, updating, giving operatives many skills and the acquisition of management. I shall not go through them all because I want other hon. Members to have the opportunity to speak.
It is clear from the report that there is a need for industrial training. We should not look at this subject merely against the background of training cuts during the recession because of Government and management decisions. It is decades since the unions restricted entry into apprenticeship schemes. When I was Under-Secretary of State for Employment, I spent my time receiving deputations from unions demanding an increase in recruitment of apprentices.
The MSC report states:
It must be obvious that sufficient money is not available to fund the sheer enormity of the training that is required in the new technology age.
The MSC seems to accept that smaller firms will not be able to afford training because of the expense of the equipment used in training.
When I was Under-Secretary of State for Employment, I oversaw the payment of unemployment benefit and training, but I found it difficult to get hold of the training aspect. The training division of the MSC did not show sufficient leadership. Often the industrial training boards were not properly staffed. I came across some that had been staffed by ex-colonials. One empire collapsed; another was created. Let us make no bones about it: neither the MSC training division or the ITBs had sufficient clout to do the work that was needed.
I believe that the Government have been totally wrong in finding defects in the MSC and then saying that they will abolish the ITBs. I recommend that they read Burke who referred to conserving and improving. The Government seem to be not conservators but smashers. They should have improved, not smashed, the system. The Government have been wrong to dismantle the skillcentre system.
The Government should not believe that employers will ever part with their money for training unless forced to do so. We shall be short of money for training unless someone pays. Either the taxpayer or the employer must pay. Both parties seem to agree that the employer should pay. If we are to have training, payment must be compulsory. It is no us sending the Under-Secretary of State for Trade and Industry—the hon. Member for Coventry, South-West (Mr. Butcher)—or the Minister of State, Department of Employment, whining—not "wining"—and dining with employers. It would be far better for Parliament to say to the employers, "In the interests of individuals, industry and industrial efficiency, we need industrial training. You must pay and provide the training on which this nation's future depends. We will introduce collective funding."
The Government will throw away Britain's industrial future unless they have the courage to face the employers with this unpalatable fact.

Mr. Richard Holt: I am disadvantaged compared with other hon. Members, because I became a Member later in life than most. I carry with me the disadvantage of having worked for my living in industry and knowing at the sharp end more about training than some of the Labour Front-Bench Members who have sought to make derogatory remarks.
We must look at the seed corn of education to determine where the original fault lies. In the education system we start by denigrating those who work in industry and commerce—those making or growing something, as the hon. Member for Truro (Mr. Penhaligon) said. It is perhaps not accidental that few people at school ever want to be salesmen. Few teachers ever say to a young person, "You should be a salesman." Yet there is no shortage of salesmen. One reason is that salesmen invariably get a car with the job. That is why the percentage of company cars in Britain is the highest in the world. That does not come about by accident, nor does the education system bring us by accident to where we are in industry.
Why do our schools teach almost exclusively French and a little German, almost to the exclusion of other languages? When will our schools start teaching more Spanish and Japanese and one or two Eastern bloc languages? It would be good for commerce and trade and for international relations if one could have a face-to-face dialogue with another person instead of relying upon an interpreter every time. However, if one tries to bring a greater variety of language teaching into the education system, the teachers rise up, almost as they are doing at the moment.
Like my hon. Friend the Member for Slough (Mr. Watts), I chose to make my maiden speech on this subject. I wish to continue the theme on which I started in the House two years ago but on which I had been speaking publicly outside for more than a decade—the theme of the lack of cohesion between education and training. Education happens in schools and training happens outside schools. There seems to be almost no relationship between the two. I resigned from an MSC committee because I wanted a headmaster of a school to be included on the committee so that there was a link between education and further education. A principal of a college of further education said that he would resign from that committee if I tried to force through the measure. In the end, I gave up trying to beat such bureaucracy.
Training boards were a good idea when first set up. They had some fundamental good points, but they were also flawed and, in the end, became a cop-out. They became too bureaucratic. There were many more bureaucrats shuffling pieces of paper around making sure that levies or grants were right than there were people involved in training. The boards were wasteful in that they did not give a true return for the amount of money that employers were forced to put into the scheme. In fact, the grants and levy scheme did not work. My company was able to obtain an exemption because it was good at training. That had nothing to do with the money element.
We should have an audit of training, not of whether companies are putting in the right amount of money. I should like to see an audit of training as part of the Companies Act in the same way as there is an audit of a company's accounts at the end of every year. It would be interesting to see how many people have been engaged in and completed training, and, in the final analysis, whether it is cost-effective.
Therefore, training boards were a cop-out. They were somewhere for people in their latter years to go on an occasional afternoon. The further education colleges are not much better. The audit report shows that they are almost worse. However, even the audit report could be flawed because the statistics on which the commission has just reported are, I understand, three years out of date.
There has been considerable discussion about skillcentres. I believe that the Government have got it wrong. It is not the first time that I have told the Government that they have got it wrong on this issue. I have told them on at least four occasions in the House, and I make no secret of it. To close the skillcentres before the other scheme had been introduced and was proven to be better was wrong. The Government should have maintained the skillcentres and found the additional resources and finances necessary to try out the new scheme, which I am sure will be successful in the rural and far-flung areas. They should not have closed the skillcentres first.
My skillcentre in Middlesbrough is one of those that are doomed. I wrote and asked why Southampton and Twickenham were not having their skillcentres closed, and why they were removed from the list. The answer that I received was that the chamber of commerce in Southampton had decided to take on any shortfall in financing of the skillcentre in Southampton. I wonder whether that option was given to the chamber of commerce in Middlesbrough, or to chambers of commerce in any of the constituencies in which skillcentres are being closed. Therefore, the Government have got it wrong in closing skillcentres.
The main reason why the Government have got it wrong relates to a point raised by my hon. Friend the Member for Slough. Seven days ago at this time of day there was a television programme on BBC North in which I launched an initiative called Job Link North. As is apparent to most people, I do not have a northern accent, although I represent a northern seat. I found that in Slough and the adjacent area where I come from, hundreds of jobs were unfilled. Therefore, I have now introduced a scheme, with the help of the jobcentres, chambers of trade and many other people, to have the local newspapers from that region sent up to the north so that people in the jobcentres and clubs can see them. I have not been partial about that because the newspapers have been put in Conservative and Labour clubs, and I think that there is even one Liberal club somewhere. Thus, as wide a spectrum of people as possible can see what job opportunities are available.
However many such initiatives are introduced, unless something is done about housing, the "on your bike" syndrome will fail. On 5 June I suggested that Ministers consider a scheme whereby anyone who has been unemployed for six months or more should be granted the equivalent of one year's benefits to act as a deposit on a house in a region of high-cost housing, subject to that person having a job and retaining that job over a given period. That lump sum, which would have been given to the person anyway for staying out of work for a further year or two or three, would allow the person to move to an area with skill shortages such as Slough and the adjacent area. It would save the Government money and give pride and impetus back to the person, but, more important in skill training, it would give a goal to some of the people in my area, so that they would take the trouble to learn skills in the traditional, old-fashioned sense, and would know that there might be a job in the end.
The prime reason why Middlesbrough skillcentre is to close is that one of the criteria is how many people go into jobs having been through the skillcentre. In an area of high unemployment, there is no need to give a person training in skills. It seems that that is the Government's attitude.

I should have thought that we would want more people to be trained in skills so that they could go wherever they wanted with those skills.
Apprenticeships have changed and will continue to change. Skills are a movable feast. One of the things in which we have a proud tradition is the standard of skill training in the City and Guilds of London Institute, which has been recognised worldwide for many years. It celebrated its centenary not long ago. The institute, which I think many people would respect, has a new director-general, who took up his post last November so that he could have a break-in period before fully taking over in April. I have spoken to the new director-general. I asked him how many Ministers he had met. After all, he is the director-general of the most prestigious craft training institute in the world. The answer was, none. There are to be informal discussions between officials, before the formal discussions between officials, before they finally meet Lord Young in November.
I thought that perhaps I had got it wrong. I thought that perhaps the trade unions had been to see the director-general and everything was all right. I have to admit that one trade union has bothered to send its man in charge of training to the institute to talk about training today and in future. That trade union is the one that is least liked by Opposition Members — the Electrical, Electronic, Telecommunication and Plumbing Union. By and large, the trade unions have little to boast about in that area.
I am getting signals from the Whip to shut up, but I want to tell the House something about voluntarism. I know a teeny bit about this industry. I should declare an interest. There was not a single betting shop anywhere in 1963—not one—because they were illegal. Since 1963, many betting shops have been opened in this country Almost all of them are managed by someone who has been trained, entirely voluntarily, in bookmaking. Not a single penny piece of public money has been put into it. Perhaps one of the reasons is that the mathematics is a little too complex for some of the teachers in our schools. However, the industry has stood absolutely on its own two feet. It has never sought anyone's assistance. It has many skilled, trained people today, all of whom have come through the business.
I spoke first on this subject two years ago. I shall no doubt speak on it again in two years' time, and again two years thereafter, because training is an ongoing subject. I wish the Government well, but I wish that they would sometimes watch the amber lights as well as the green ones.

Mr. Ted Garrett: It always seems to be my lot in debates to be what would be termed in football parlance as the sweeper-up. However, I have sat through the debate patiently and enjoyed some of the speeches. I have been amazed at the abysmal ignorance of some Conservative Members about real life in engineering and industrial apprenticeships. I agree with the hon. Member for Langbaurgh (Mr. Holt) that the closure of skillcentres was a gross error of judgment. The skillcentre at Killingworth is being closed when thousands of miners are being put out of work, and there is a need to train mining, electrical and mechanical engineers from the mining industry in other skills.
The history of the Government's approach to training has not been good. Indeed, it has been abysmal. The


Minister made some remarks which got up my nose, especially when he asked the Opposition how many hon. Members had visited a factory. I have visited many factories, especially during the last few years. It is normally a visit to hear about redundancies or, as it was last week, to hear about the loss of 700 jobs and the closure of a plant. That pattern has gone on for years in many areas.
The Minister then said that training must be relevant to the future. If he had said that five years ago, the position might have been different. A glorious opportunity has gone. We should have been spending our way out of trouble and on industrial training at the height of the depression. That opportunity has gone, as has the hon. Member for Slough (Mr. Watts). I wanted to tell him that he has an abysmal knowledge of the trade union movement and the apprentice payment scheme. However, I agree with him that there are skill shortages in some areas.
The Government have engaged in an academic exercise on how to spend less money and gain more, but it does not work. We are not spending the necessary time, effort and energy in training for the future, relative to a greater need and a higher level of technology, to meet the rapid changes. That is where the Government have gone wrong.
I agree with my hon. Friend the Member for Coventry, North-East (Mr. Park) who contradicted the Minister's remark that training for its own sake was no good. That is open to challenge. Training does not merely involve studying technology, and training, but meeting people and discussing the progress of educational training. It provides the opportunity to discuss the problems that arise in industry and commerce, and helps to build up an ability to communicate with others on problems. Earlier, it was argued that training facilities were being moved into rural areas. What good will that do when one instructor trains four or five people in a village of 400 people? Those people will remain isolated from the arguments that go on about the problems of industrial training. They will become introspective, instead of seeing the wider world of technology.
I too have limited time, I shall conclude. The motion sums up every problem that faces the Government, and their complete failure to meet the challenge. I feel sorry for the Ministers. The Secretary of State and his Ministers know in their hearts that they are being forced by the Treasury into financially based action, which they dislike. They have been in office long enough to realise that the policies that they are being forced to implement will not work. It is time that someone from the Department said so, and took a much tougher stance in Cabinet.

Mr. Tony Baldry: Proposals by the Manpower Services Commission to streamline Britain's skillcentre network have met with the predictable response from Labour spokesmen that the Government are applying their dogma of market forces to training. However, closer examination of the facts shows that the proposals are necessary if Britain is to have any genuine hope of competing effectively against our major rivals for world trade.
Last August, the Institute of Manpower Studies published a report with the stark message that spending on vocational training must rise if Britain is to compete. The

report, entitled "Competence and Competition", concluded that Britain was seriously lagging behind its rivals in training, notwithstanding that the Government and British taxpayers were paying a higher proportion of training costs than was the case in the other three countries studied—Japan, West Germany and the United States.
The difference in training and competitiveness is not because of too little being done by the Government but, as the report found, the fact that whereas businesses in Japan, West Germany and the United States want to invest in people's training, British employers rarely assess what they should spend on education and training. In West Germany, which has a similar population to Britain, each year employers spend about £7 billion on continuing vocational education and training. Some 80 per cent. of the costs of Germany's expensive apprenticeship system is funded by employers, yet there is no need for compulsion because German employers see the value of investing in their work force. By contrast, too many British employers for too long have been inclined to think that whenever they are short of skilled people, they have only to telephone the local job centre and the people they need will be available and ready trained. They are not.
If Britain is to have a better skilled, more flexible work force, employers must take the lead in training. After all, they are in the best position to know their skill needs and to train people for new jobs. The machinery and technology in which companies invest can be the same the world over. What makes the difference in a highly competitive world is what people do with that machinery or technology—that means training a skilled work force, and employers investing in people.
Until recently the skillcentre network has had all too little to do with employers. All too often people at skillcentres have been trained speculatively for yesterday's skills with no prospect necessarily of a job at the end of their course. Without business direct from industry, skillcentres became all too dependent on one source of income — the budget of the training division of the MSC. But the MSC found that it could often buy equally good training from colleges of further education, often at half the price of skillcentres. Skillcentres have become increasingly under-utilised and expensive to run and, therefore, last year the skillcentre network had to be subsidised by taxpayers by about £12 million. That £12 million was spent on bricks and mortar, not on training anybody. If that had not been rectified, that subsidy would have been become £50 million in a couple of years' time, which is almost a quarter of the money available for adult training. Every pound spent on subsidising skillcentres is a pound less for training people. Therefore, it must make sense to streamline the skillcentre network to ensure that it carries out training directed to known employment needs, and to skills that are needed today, in the 1980s and in the next century.
It does not matter whether the building is called a skillcentre, a college of further education or a technical college. What is important is the quality, relevance and cost-effectiveness of the trainingin. Regarding the adult training strategy, the number of adults trained under MSC programmes each year will double to 250,000 by 1986, including a significant increase to 125,000 in the number of unemployed people getting new skills training. It is hardly surprising, therefore, that both the adult training strategy and the skillcentre training agency's business plan


received the unanimous endorsement of the Manpower Services Commissioners, including the trade union commissioners.
I shall conclude by touching on the youth training scheme. It is only Opposition Members who knock the YTS. They pay lip service to it, but when it comes to the crunch, they never give it their wholehearted endorsement. They are torn between wanting to endorse it and not wanting to give the Government credit for a good scheme. We have been asked what we want from a two-year YTS. It is clear what we want and what the Government and the MSC can deliver. It is a scheme to provide a vocational and educational training and work experience to all youngsters, ending with a vocational qualification—a qualification demonstrating occupational competence that can be taken into the work area.
Much has been said about the Government's contribution to the scheme in terms of funding, but we should remember this. It looks as though the Exchequer money available could stretch to a contribution of between £150 and £170 a month for each trainee for each of the 24 months of the two-year programme. If we take the mid-point of that range, it would mean an expenditure of £3,840 per trainee per annum. We should compare that with what is provided in West Germany. On its two-year apprenticeship scheme, the average net cost to the employer is £3,600 per trainee per year. No money is provided by the state. Why do German employers continue to make that contribution each year? The Germans are fully conscious that their industrial success and high standard of living depend upon their ability to produce advanced goods reliably and efficiently. That means that the Germans have stopped regarding training as an on-cost and now regard it as an investment.
Britain will improve its position not by forcing employers, through a statutory framework, to contribute more towards training, but by making employers realise that training is an investment, not an on-cost.

Mr. George Park: I do not wish to blight the parliamentary career of the hon. Member for Banbury (Mr. Baldry) by saying that I agree with his comparison with German industry. Suffice it to say that, in any recession, training is the first casualty. I understand that, especially in small businesses employing fewer than 200 people, the struggle to keep the business alive—it certainly is a struggle under this Government—often leads to dispensing with training. It may seem to be necessary as a short-term measure, but it is not prudent in the longer term.
A vital element in any recovery is confidence. The Government do not help to create confidence by saying that they will abolish the state earnings-related pension scheme because it will not be affordable in the future. The only conclusion that can be drawn from that is that the Government are not confident that Britain will have the sustained recovery that would make such a pension scheme affordable.
We are entitled to ask why there is such a shortage of skills. Between 1980 and 1984, 170,000 craftsmen were lost to the engineering industry and several thousand apprentices were made redundant. But skilled workers can turn their hands to other jobs. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, people may be reluctant to return to an industry when it

is held in such low esteem by a Government who believe that we can earn our living by taking in each other's washing. Our competitors realise that a strong manufacturing base is essential for a thriving economy, and, therefore, Germany trains twice as many technicians as we do.
Without wishing to detract from the initiatives which the Minister mentioned, it is still true that, on 26 April, the CBI announced that one in 10 firms expects its output to be held back by a shortage of skilled labour during the next quarter, and that this was expected to remain the same during the next year. Some firms expected the position to become worse.
Unfortunately, industry, with some honourable exceptions, has never given training and retraining the priority that they deserve. That applies especially to firms employing fewer than 200 people, which rarely have training facilities. They expect to be able to lift skilled personnel off sky hooks when they need them, and to replace them on the hooks when they do not need them. They expect to be able to poach enough people to meet their needs. Firms must substantially alter their attitude to training and regard it as an essential cost if they are to remain in business over a period, because a major stumbling block to better performance by British industry is technical expertise and training. I accept that apprenticeships must change with the times, but now we have only 8,000 engineering apprentices compared with 25,000 only recently. If anyone imagines that those 8,000 apprentices will meet our future needs, he had better think again. That number will go nowhere near to meeting the needs of industry.
As to the introduction of a two-year YTS, given the will by Government and industry, it should be possible to identify and tailor schemes to the needs of industry. That should be possible, but I am discouraged about the appreciation of the need, because on the same day as the CBI made the announcement to which I referred, the west midlands CBI said in a covering letter that it had done no more work on the identification of skills shortages than had been done at national level. Had that organisation been seized of the need, it would have examined the matter much more deeply.
Those tailored schemes would be aimed at specific needs. I believe that industry would be prepared to contribute towards the cost, and it could even go some way to eliminating the criticism that YTS is a cheap labour scheme by providing real jobs at the end of the training. Such a scheme would need greater commitment, but if translated into reality the problem would be to accommodate all those who wished to take up the training.

Mr. Alan Howarth: The motion tabled by the Labour party is a combination of reaction and party political propaganda of the most depressing sort. The Opposition hark backwards to a pattern of training that was inadequate and which the Labour Government did nothing to improve. The principal features of the Labour Government's policy for the provision of skills were the abolition of grammar schools and the invention of the youth opportunities programme. That response was derisorily inadequate, if not actively destructive.
The speech of the hon. Member for Huddersfield (Mr. Sheerman) betrayed his resentment of the Government's approach, which has been thoughtful, constructive and


determined, and through which a great deal has already been achieved. The Government have produced a succession of documents, including the "New Training Initiative" and responses to consultation, "Training for Jobs", "Education and Training for Young People" and, on the education side, "Better Schools" and "The Development of Higher Education." Those documents have defined the issues, led the debate and helped us to establish a national recognition of our modern needs.
Those needs are a foundation of basic education in which every pupil has the opportunity to acquire intellectual, practical and social skills, as well as the confidence and discipline to enable him to cope with and adapt to the modern world of work. That foundation must be built upon with a period of occupational training which will provide the bridge from education to a job. Thereafter, every worker must have the opportunity of periodic retraining so that he will have the security and dignity of knowing that he will be needed and can continue to contribute.
Central Government have increased their spending allocation to training by four times in the last five years. We are moving away from a situation in which 16-year-olds are cast, vulnerable and often ill prepared, on the job market, 40 per cent. of them with no formal qualification and a high proportion of them having been for years demotivated at school and personally pessimistic about their future. We are moving to a situation in which every school leaver will have the opportunity to undertake a considered programme of work experience and structured training leading to qualifications, so that at 18 youngsters will be able to take their place in the job market, properly equipped and prepared.
What is really happening in relation to skill shortages? Certainly the skill shortages are not such as to abort the present recovery. The CBI survey in April found, however, that one in 10 companies expected skill shortages that would inhibit their future progress. It is interesting that within the severe shortages were shown shortages of skilled textile workers. The traumatic experience of the textile industry in recent years has shown that there is no absolute shortage of skilled textile workers.
Policies to meet skills needs must take account of three aspects of the labour market—mobility, cost and training.
We must help put the right people in the right places. My hon. Friend the Member for Slough (Mr. Watts) spoke shrewdly on the subject. I will only add to what he said by pointing out that it is important to pursue policies to improve the provision of private rented accommodation, so that people who choose to move from Sunderland to High Wycombe, for example, can find somewhere to live.
If there are shortages in skills and a tradition of under-investment, it is partly because of excessive costs. In that, the trade unions have, unfortunately, played a damaging part. They have sometimes made it impossibly expensive to provide the necessary training. They have insisted on time serving when increasingly we need to achieve competitive standards and to adapt rapidly. The unions insisted upon demarcation when there was an increasing premium on adaptability and the transferability of skills. Above all, trade unions have forced up the pay of young workers. The whole labour movement remains doggedly intransigent on that. In the interests of young

people, it is realistic to recognise that in the early years of their work experience they should be trainees rather than employees. As a result of training, they will be able eventually to make their full contribution and earn adult levels of pay.
When considering the educational content of training we must continue to address ourselves to the problem of the cultural gap which has long been established between education and industry. Much is now being done to build bridges. The Government are making grants to improve local liaison. The CBI has its Understanding Industry initiative. That is helpful, but I should like the in-service training of teachers to offer more opportunities for teachers to be seconded so that they can enjoy first-hand industrial experience. Then they would no longer convey to pupils the idea that a career in industry or commerce is second best. Equivalently, I should like industry to be more active in contributing to the development of the curriculum.
We chose to destroy our technical schools in the 1970s. It is an interesting and sad irony that over the same period the Germans have moved to a position in which 50 per cent. of their schoolchildren now attend technical schools—the Realschulen. Research under the auspices of the NIESR has found that average levels of mathematical attainment by German school leavers are two years ahead of ours.
Much has to be done. There is no doubt that the Government's initiatives in the reform of the curriculum and the examination system — for example, the introduction of the GCSE, with its emphasis on practical competence and problem solving—will help, as will the TVEI.
However, we cannot afford certain self-indulgent professional, political and bureaucratic attitudes. We cannot afford the NUT to block the reform of teachers' career structures. Local education authorities, including some which were Conservative-controlled, went into sulks because the Government insisted that the MSC should spend some of the money which they were accustomed to spending. Some Left-wing Labour-controlled authorities are spurning TVEI on the bogus principle that it erodes their proper sphere of influence.
Industry can make a much larger commitment to training for the future. The lessons which are so well expressed in the MSC document "Competence and Competition" will not be ignored. The best of British companies recognise the need for a policy of investment in the use of human resources from the top down. It is people who cause a company to succeed or to fail.
I am confident that industry will respond to make an even greater success of the youth training scheme which has already had a remarkable effect in only two years. We must build on the successes and recognise that YTS is not a palliative for unemployment but a key part of a policy to build suitable training bridges between school and the entry to employment at 18-plus on a properly trained and qualified basis.
Unions and industry should respond to the Government's challenge of a second-year YTS. There will be difficulties. Many firms have as many YTS trainees as they can handle. Some industries, including parts of engineering, are in a fragile financial position. Training costs are higher in some industries than in others. Many new participant firms will be needed and much has to be


sorted out before April 1986. However, industry will benefit from a better trained, better motivated, better skilled and more flexible work force.
The Government deserve to be congratulated on their policies to meet Britain's skill needs.

Mr. Geoffrey Robinson: The House is at least agreed about the appropriateness of the timing of today's debate. However, the Minister's speech betrayed an awful complacency and a dangerous ignorance of the extent and gravity of the problem. He was blasé. Perhaps he is bored with the subject.
I sympathise with the Minister because the problems with which he has to grapple daily are not easy. However, the problems will not go away. Nothing that he has said today will make it easier for him or his Department to deal with the problems of British industry or of British youngsters who are in urgent need of skill training to meet the country's needs.
This has been a good debate, but we expect something better from the Under-Secretary of State than a recital of the odds and ends about which he will be anxious to tell us. We want him to respond to the heart of the debate and to tell us how the Government intend to reverse the downward spiral. I accept that he will not have long to do that.
I must comment on four outstanding speeches from the Opposition Back Benches. I refer to the speeches by my hon. Friend the Member for Newham, North-East (Mr. Leighton), who spoke with the full authority of a Chairman of a Select Committee; my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding); my very close friend the hon. Member for Coventry, North-East (Mr. Park), who spoke with detailed knowledge of the midlands; and my hon. Friend the Member for Wallsend (Mr. Garrett), who spoke with a depth of experience derived from a lifetime in industry.
Opposition Members have our different perspectives and emphases, but we are agreed about the extent and gravity of the problem. A wealth of reports has been issued in the past two years. It seems that everyone but the Minister and his Department are seized of the difficulties and dangers. The document "Competence and Competition" from the NEDC and the MSC — [Interruption.] It is here. It has obviously not been read by the Minister. All that he has done is read the title, but I have read the report. That is why he could not today talk with any meaning about that important report. If the Minister had read the report, he would not have talked so much rubbish about going round factories in the west midlands, without understanding that, behind the automated assembly lines, there is a need for technicians, apprentices and skills. The Minister does not understand. If he cannot see people or apprentices, he does not think that we need skills or apprenticeships. Of course we do, and we need them in the same numbers as we had previously. We are not even replacing those who are leaving because our factories are declining. Skilled fitters and skilled electricians are doing other jobs in the economy and no longer fulfilling their proper roles.
There have been many reports on the matter, including one from the House of Lords. There can be no doubt about the serious danger that we face. My hon. Friend the Member for Huddersfield (Mr. Sheerman) quoted the figure for the amount spent by British industry on training

—figures provided by the MSC—as being 0·15 per cent. compared with what the MSC believes should be 2 per cent. of turnover. I do not want to quibble about the figures; I wish only to bring home to the Minister, the Under-Secretary and Conservative Members the extent of the gravity of the position. There is no room for complacency. Britain is going backwards while other countries are racing forward. That is something that the Minister does not want to grasp.
In a moment, I shall put forward policies that the Government should adopt—[Interruption.] I could take a great deal longer with my speech, but the Under-Secretary would not like his hon. Friends to encourage me to do so. If the Minister does not believe what I am saying, let him read the news release from the CBI. After all, Sir Terence Beckett is a great supporter of the Conservative party. It states:
A breakdown of the skill shortages now being faced by British manufacturing industry shows that they cover many types of jobs ranging from welders"—
[Interruption.] Of course robots are on line doing blind spot welding—it is the first generation of robotics. But there is a great deal more to manufacturing than robots on a car assembly line. The report continues:
and sewing machinists, to technicians and computer programmers … they cover a wide range of jobs and are not confined purely to information technology.
I shall not read on because time does not permit me to do so.
What has been the Government's response? I can pick out four points, having listened to the debate. First, they have reduced the skillcentres by one third, and it has cost them £12 million to do so even though there was opposition from their own supporters. Secondly, the Government have abolished 16 training boards because they were not perfect and, supposedly, were not doing their job. Has the private sector been doing its job? Of course not. If we are to give the private sector a lead, if we are to encourage it and bring it with us, we must establish something to achieve that. Of course the boards were not perfect, but the answer was not to close them; it was to make them better.
Thirdly, the Government have blamed the unions. We hear that time after time, ad nauseam. Yet the Policy Studies Institute said about Britain's non-problem, the unions:
In Britain opposition to the introduction of the new technology from the shopfloor or the trade unions is seen as an obstacle to its adoption far less frequently than economic, technical or skills problems.
If only the Minister and his hon. Friends understood that.
It continued:
half as many
are experiencing problems because of the unions
than in Germany … or France.
I shall let the Minister see that report.
Fourthly, the Government have said, "Let us leave it to the companies; voluntarism will work." Cannot the Minister understand that it was because voluntarism was not working in the 1960s that we embarked on industrial training boards? Cannot the Minister see the crisis of the growing shortage of skills across the whole range of industrial requirements? It means that voluntarism is not working.
If the Minister does not like what the Labour party is saying, let him read the report of the House of Lords Select Committee on Science and Technology entitled "Education and Training for New Technologies." What is


wrong with the four or five important recommendations that it contains? We have not heard a word about that from him. Perhaps the Under-Secretary, when he replies, will say that he will implement those recommendations because he is responsible for training for industry.
I do not want to get into the debate about whether training should be for training's sake — although I happen to believe that. I believe that we will get the training that we need only when we stop allowing our industrial base to decline. It is only when the jobs are available that there will be training geared for them. The expansion of the economy and of the skill training programme are the twin pillars on which we must base our policy to meet the requirements that those will bring with them.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): In the six minutes left to me, I wish first to thank my hon. Friends the Members for Bedfordshire, South-West (Mr. Madel), for Slough (Mr. Watts), for Langbaurgh (Mr. Holt), for Banbury (Mr. Baldry) and for Stratford-on-Avon (Mr. Howarth) for their contributions. I also acknowledge the contribution of the hon. Member for Truro (Mr. Penhaligon), who got things totally wrong when defining the industries for which we should train and those for which we should not.
I thank the hon. Member for Newham, North-East (Mr. Leighton) for his sometimes elegant and sometimes inelegant swipe at the YTS. I also thank the hon. Member for Newcastle-under-Lyne (Mr. Golding), whose filibuster I have heard eight or nine times before, and which was inevitably targeted on British Telecom—a success story that he would rather not begin to recognise.
I wish to address my brief remarks to those parts of the motion that state that the Opposition
condemns the Government's failure to make proper provision for improving the extent and standard of modern skills training that is essential for Britain's economic recovery and industrial growth.
It then admonishes the Government for
its failure to provide quality training for the new technologies
and goes on to recommend a comprehensive statutory framework.
I can leave to one side the micros-in-schools programme. There is not time to discuss that today, other than to say that it has been a magnificent success, producing the first computer-literate generation of school leavers. There is no time to discuss the information technology centres—all 175 of them. There has been a great deal of argument tonight about placement rates from the various programmes, but we are talking about 75 per cent. — plus placements in jobs from the information technology centres.
Saddest of all, there is not time to discuss a certain document. There has been some to-ing and fro-ing about who has read what and who has bothered to do his homework. I am convinced that Opposition Members have not read the script for tonight's debate—it is called "The Human Factor—The Supply Side Problem". Not only has my hon. Friend read it; he helped to write it. There were contributions from the MSC and, most important of all, contributions from people in industry who actually hire graduates in the new technologies—the graduates on whom we depend for our future economic well-being.
We must address ourselves to another problem—one that the hon. Member for Huddersfield (Mr. Sheerman) failed to diagnose accurately. He fell into the old mistake of talking about a dual labour market and high tech versus low tech. There is no such thing as a clear distinction between high tech and low tech. The so-called low tech industries, by becoming involved in new production processes and by applying intellect and added value to their manufacturing processes, in fact become sunrise industries; they become the users of information technology.
I listened carefully to what the hon. Member for Huddersfield said. He spoke about a coherent and comprehensive approach. He then spoke about a modular integrated approach—part of the overall understanding of life and work. He then went on to talk—a little more ominously — about a comprehensive statutory framework, then about a comprehensive contributory fund and then about training committees with trade union involvement. The hon. Gentleman wrote his speech on the basis that he might obtain a good mention for terminology in the editorials of The Guardian; it was not a speech suitable for tonight's very serious debate.
The missing element in the assertions of the hon. Member for Huddersfield was the costing of the proposals contained in "Plan for Training". On the Labour party's own figures, the centralised, bureaucratic, modular, comprehensive and integrated—call it what one will—approach would cost £6 billion. The statutory minimum wage to which his party is committed would cost another £200 million. The cost of full trade union rates of pay for YTS trainees would cost £260 million—and the hon. Gentleman tells us that we do not understand the market forces behind training. The Government realise that the pace of change, the flexibility that is required and the fluidity that is necessary in our labour markets and training markets—
It being Seven o'clock, and there being private business set down by direction of THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7 (Time for taking Private Business), further proceeding stood postponed.

Birmingham City Council Bill (By Order)

Order for consideration, as amended, read.

Motion made, and Question proposed, That the Bill, as amended, be now considered.—[Mr. Garel Jones.]

Ms. Clare Short: I am grateful to be called to speak on the Bill, particularly as I was not called until 9.53 pm on Second Reading and then the closure was moved. I was unable to put before the House my views on the Bill, despite the fact that the proposed race will take place largely within my constituency.
I deeply resent some of the comment that has appeared in the local press in Birmingham, especially in a free newspaper that I have never seen called the Birmingham Despatch. That newspaper suggests that the Birmingham Members of Parliament who have ensured that the Bill is properly debated in the House are in some way obstructing its passage. The implication is that the House should not use its powers to scrutinise any legislation that is put before it.
As I said at the beginning of my speech on Second Reading, which was so rudely interrupted, I hesitate to speak against or oppose a Bill which is supported by the overwhelming majority of councillors in Birmingham. My view is that local democracy should be much greater than it is at present and that the ultra vires rule should be abolished. Local authorities should be given the power to do whatever they think right and for which they have authority from the local people, provided that they can afford so to act and are given reasonable powers to raise moneys to finance such expenditure. That is not the current situation. Local authorities are severely restricted in what they can do, and they must seek parliamentary authority to go beyond those powers. It seems that those of us who are elected to represent the interests of our constituents should properly scrutinise any measures that come before us. When we have a measure that will affect the people of Birmingham, it is particularly important that Birmingham Members should pay attention to what is being proposed — [Interruption.] Would the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) please be quiet?
The second reason why I hesitate to criticise the Bill is that we have repeatedly been told that a referendum, which was taken in the area where the road race is to be run, suggested that local residents were overwhelmingly in favour of the proposal. I find that rather odd, because I have received a number of extremely critical letters and met many people who live in the area who are highly critical of the proposals in the Bill.
We are told that referendum forms were sent to 4,520 residents and that about 34 per cent. voted. Apparently 1,290 voted yes and 283 voted no. Perhaps that is a significant majority in favour of the Bill, but it means that many people did not consider the proposal. When one considers the information that was put to those who participated in the referendum, it is clear that they were not fully informed of the facts, especially the potential cost—[Interruption.] Mr. Deputy Speaker, I appeal to you to do something about the racket that is taking place on the Government Benches below the Gangway?

Mr. Anthony Beaumont-Dark: We are listening to your every word, girl.

Mr. Deputy Speaker (Mr. Ernest Armstrong): I can hear clearly what the hon. Lady is saying.

Ms. Clare Short: I am grateful to all the attentive listeners.
When those who live in the area where the race is proposed to be run were asked to participate in the referendum, a piece of paper was circulated outlining the proposals. That piece of paper was misleading in a number of serious respects. First, it was misleading to suggest that the race would become a grand prix. There is a general understanding in Birmingham that the race will be a grand prix, but that is completely wrong, and that somewhat changes the nature of the proposal.
Secondly, and more seriously, the people of Birmingham who said that they were in favour of such a race were not told the potential costs that would be incurred and might result in other less than adequate services. The council, in its publicity about the race, has misled people by not stressing that the potential cost is quite serious.
A leaflet, entitled "Road Race Facts," gives six facts, the last of which asserts that Birmingham ratepayers will not be paying for the race. It states:
The cost to Birmingham ratepayers will be absolutely nothing. Indeed, they will benefit as more much needed cash will be brought into the authority's kitty.
That is false and misleading, and it is bad that the council should put out such material.
In a glossy package, which was assembled and distributed in Birmingham, there is a leaflet on the jobs that the road race would create. It says
The race will make money for the City Council so the ratepayers will not lose out. We will not be taking decisions on whether to repair leaking roofs or to support the race. The road race will bring more cash into the authority's kitty.
The literature that has been issued by the council to the people of Birmingham is gravely misleading. Many people who consider the road race to be desirable are not aware of all the facts.
As I have said, many people in Birmingham think that a grand prix is proposed. One of my hon. Friends who was a member of the Committee which considered the Bill has passed to me a copy of the summary that was put before the members of the Committee. The first paragraph reads:
The purpose of the Bill is to authorise a motor racing went once a year in Birmingham, not far from the centre. The event is based on the Monaco Grand Prix.
Again, it is suggested that there will be a grand prix in Birmingham, but that is not so. It will be a much lower level race with less status, and it will bring fewer people into the city. That has serious implications for the money that might come into the city as a result of the road race. The people of Birmingham have been misled on this crucial issue.
My first objection to the Bill, as drafted, is the cost. We are told by the council, though the people of Birmingham have not had this information put to them, that the proposal is to spend £1·5 million on capital expenditure in the early stages to prepare the road for the race. Serious alterations to the road are to take place—widening and the removal of flower beds and other amenities in the area. In addition, it will cost £1·5 million in revenue costs for each year that the road race is run. The council's estimated figures show that it is fairly certain that at worst the road race will cover


its own costs. There may not be any profit for the people of Birmingham, despite what is said in the leaflets to which I have referred, but the council is fairly confident that there will not be any loss.
I shall seek to move amendments designed to ensure that there will not be a loss. I am worried that the council is giving assurances about the money that it will spend and the income it will receive, but the Bill will not protect the people of Birmingham from much greater expenditure and much smaller income than is projected. My deepest fear and greatest objection to the Bill is that the people of Birmingham could spend millions of pounds, which could be used to improve housing facilities, which are in a serious state of decline, or to protect other declining public services. All this money will be spent on a race which will be a loss maker for the people of Birmingham, most of whom will not be able to attend it because of the cost of the tickets.

Mr. Nicholas Soames: Does the hon. Lady agree that she is speaking of the type of infrastructure spending that she and her hon. Friends spend much time complaining is not taking place in Birmingham?

Ms. Short: No, it is not the type of infrastructure spending that I favour. I do not favour turning the hearts of our cities into race tracks. I favour an increase in infrastructure spending to improve the facilities for all the people of our cities — for example, putting right decaying sewers.
I shall be moving amendments designed to hold the council to its financial projections. The council has given the sums of money that will be spent, but there is no guarantee that it will keep to those figures. Later in the debate we can discuss the need to hold the council to its projections so that Birmingham ratepayers are not required to spend even more.
The money that the council proposes to spend will, of course, come from the capital expenditure budgets of the people of Birmingham, who are already severely restricted financially. It is notable that the area around which the race will be run contains many tower blocks and maisonettes that are in a serious state of disrepair. Each month, when I conduct my advice bureau in that part of the city, people complain about the state of the tower blocks, with damp, condensation, mould and a general lack of repair. Caretakers lose their jobs or leave and are not replaced. There is a general air of decline and grottiness about those dwellings.
When we ask the city for more expenditure to enable people to live in dignified housing in the area where it is proposed to hold the race, we are told that, because the Government have restricted the money available for Birmingham to spend, there is no additional finance available. It seems ironic that Birmingham can find money to promote a road race, but not to repair the homes of those who live in the area surrounding the race route.
Many Birmingham people are under the illusion that the road race will be great fun, with free entertainment for anyone wishing to attend. Indeed, in an experiment to see whether the event would be popular, the city of Birmingham ran a "fun day" and invited people to come free on that day. I have received letters from people telling me not to be a spoilsport and that people would love a free day out.
It will not be free. The tickets will range from £5 to £25 a head for each of the two days of the race. Most Birmingham families cannot afford such expenditure. Indeed, among the 300,000 people who live in the six inner Birmingham constituencies, the rate of unemployment is 30 per cent. The unemployed of Birmingham will not be able to afford the cost of tickets for the road race. I shall be moving an amendment later to require the council to charge the residents of Birmingham half price. Anyone who argues that this will be a fun event for the people of Birmingham should be prepared to accept such an amendment.
Another reason why I have doubts about the proposal arises from a briefing document that was circulated by the RAC prior to Second Reading. The RAC made it clear that it had grave doubts about the Bill. It did not think that road racing was desirable in Birmingham. In paragraph 8 of its briefing document, it stated:
The RAC Motor Sports Association has declared its policy that motor racing should be on purpose-built circuits where there has been substantial investment of resources to ensure that adequate facilities will be available—and where there will be maximum practicable safety for competitors and for spectators. Such circuits also permit training, testing and practising at all times and safety provisions are continually being improved.
That sentiment makes sense. We were told in Committee that objections to the idea had been withdrawn. When I telephoned the RAC today and spoke to Mr. Jack Smeaton, one of those under whose name the briefing document was circulated, he made it clear that the RAC's view had not changed, that it still had grave doubts about the proposal, that it was opposed in principle to road racing and that, for reasons of safety and efficiency, it should be confined to circuits. However, given the size of the vote on Second Reading, the RAC says that it is keeping its head down, that it will comply with the will of Parliament and continue to look in detail at the proposal. It is not clear, therefore, that at the end of the day the RAC will approve the race.
We could have an even worse scenario, with Birmingham spending a considerable amount on changing the roads and preparing for the race, only to find that a proper, high quality race has not been approved and that the money has been wasted. In considering the vision that inspired the road race proposal, we must note that Birmingham is in deep and dangerous economic trouble.

Mr. Beaumont-Dark: It will be in even deeper trouble if the hon. Lady stays much longer.

Ms. Short: The rate of unemployment in inner Birmingham is 30 per cent. Over the city as a whole, the rate is 30 per cent. Birmingham encapsulates the major problems of the British economy.

Mr. Beaumont-Dark: rose—

Ms. Short: I shall not give way in view of the silly comments that the hon. Gentleman has been making.

Mr. Peter Snape: My hon. Friend should perhaps reflect, when referring to silly comments made by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), that that hon. Gentleman is normally paid by a Birmingham newspaper, which makes me lean to her side of the fence rather than to his.

Ms. Short: While I do not always agree with the hon. Member for Selly Oak, he usually behaves in a courteous fashion. He has not been behaving that way today. That is why I shall not give way to him.
I have explained why I have serious objections to the Bill. The people of Birmingham have been misled into thinking that the race will be a grand prix, when it will not, because of the cost involved, and the likelihood is that it will not prove profitable. The tickets will be so expensive that most Birmingham people will not be able to afford to attend.
If the Bill is amended in the ways in which I am seeking, I shall not oppose it, but it will not be with enthusiasm that I shall support it. The leadership of Birmingham city council seems to be adducing an argument similar to that put forward by the Government in trying to solve the problems of the British economy, with an apparent willingness to write off manufacturing and to look to services as a major source of income and employment.
In the Soho ward of my constituency, unemployment has reached 40 per cent. Matthew Bolton and James Watt developed the steam engine there, and that concept led to the industrial revolution.

Mr. Beaumont-Dark: I am pleased that my behaviour has improved sufficiently for the hon. Lady to permit me to intervene. Does she agree that if, as she says, the problems of Birmingham are great and that much needs to be done, it is time to encourage the sort of enterprise that the Bill proposes? The motor industry is important to Birmingham. The publicity that would come from the race—which I believe would be profitable—would focus attention on the way in which we were taking steps to solve our problems. It is a time for enterprise and a little risk. Why is she against that?

Ms. Short: I agree that the hon. Gentleman's behaviour has improved. I do not agree that a low level road race with saloon cars, held for one day, will do anything to restore Birmingham's manufacturing base. Birmingham's manufacturing, like manufacturing throughout the country, needs major new investment so that it can be modernised to use new technology.
The hon. Gentleman will know that the output of manufacturing in Britain is still lower that it was in 1979. I agree that, with intervention from central Government and local government to restructure manufacturing, it is highly likely that the number of people employed in manufacturing would decline compared with 1979, but the number would decline in a context of highly profitable industry, with people in employment, and with money available to be spent on public services and leisure amenities in which all could participate. That is the desirable way forward for Birmingham—not spending money on gimmicks such as road racing and convention centres which seek to bring in rich foreigners who might spend a little money in our city and create a few jobs in catering, or in the sales of ice cream and beer. I repeat that investment in modern high technology manufacturing is the way forward for Birmingham, not in convention centres and road races.

Mr. David Ashby: Does the hon. Lady agree that if there is a desire to show off the motor manufacturing wares of Birmingham, there are two race tracks close by which could be utilised — Silverstone and Donington? They would be happy to lend their race tracks to the city of Birmingham to enable Birmingham to display its wares in safety to the world at large.

Ms. Short: That is an attractive offer. I am sure that people in Birmingham will take note of it and perhaps come back to the hon. Gentleman for further information.
I have grave reservations about the Bill, and I cannot support it as presently drafted. If the amendments are made, I shall not oppose the Bill, but it should not be thought by anyone in Birmingham that Birmingham's economy will be put right by events such as this or that they can provide dignified work and proper leisure and public services.

The Minister of State, Department of Transport (Mrs. Lynda Chalker): It may be helpful if I intervene early to re-state the Government's view on the Bill.
As the House knows, the Government traditionally stand neutral in relation to private Bills where no major matter of principle is involved. This Bill is no exception. We regard it as primarily a local matter. Listening to the hon. Member for Birmingham, Ladywood (Ms. Short), one realised the extent to which it is a local matter. We are not opposed in any way to the principle of the Bill as it stands. It will be up to Birmingham city council to make its decisions on priorities, and I am sure that during the debate we shall hear the varying views on those priorities.
The Government considered whether the concept of a city centre motor race constituted a precedent with adverse effects on national sporting interests. Hon. Members may remember that that was one of the issues raised on Second Reading. We sought assurances from the promoters of the Bill as to the construction of the circuit, the number of days per year on which racing could be permitted, and the type of racing allowed. The provisions of the Bill are very restricted; racing will take place on only one day a year. The circuit is essentially city streets marginally modified, and there will be no grand prix type racing. That is absolutely clear.
The Royal Automobile Club, the body for controlling motor sport in Britain, indicated to me that it was opposed to the Bill at the beginning. I listened carefully to its concerns, but I concluded that there was not sufficient cause to seek to influence the passage of the Bill. There was a majority in favour of the Bill on Second Reading, following which the chairman of the RAC wrote to me to say that the RAC accepted that the principle of the Bill had been approved by this House and that it intended to make no further representations on the issue.
I understand that the RAC is now discussing the organisation of any future race in accordance with its own rules, and the detailed track requirements, with Birmingham city council. That is the very spirit of co-operation that I urged on Second Reading, and I applaud the fact that at last the RAC and Birmingham city council are working together in co-operation. That will, I believe, enable Birmingham to have its motor race, and enable the RAC to ensure that the race meets its own stringent requirements — a matter about which other hon. Members and I have expressed concern.
The Government also have a duty to oversee other general matters of national concern which are relevant to the Bill.

Mr. Ashby: Does my hon. Friend realise that the RAC is still against the principle of the road race? On the other hand, if Parliament approves the road race, the RAC is bound, as the governing body of the sport, to ensure that


the race takes place according to its rules and in the safest possible manner, so of course it will co-operate and talk to Birmingham city council and do what it can. But the RAC still remains opposed to the principle of the motor race.

Mrs. Chalker: In the discussions that we had before the Second Reading debate I took care to find out exactly what was being said by the RAC and, indeed, by Birmingham city council.
On 17 April last, I received a letter from the chairman of the standing joint committee of the RAC, the Automobile Association and the Royal Scottish Automobile Club which expresses their views. The letter says:
Certain specific matters which were causing concern have now been the subject of acceptable assurances from the City council, but the Bill remains of interest to the Standing Joint Committee because, if enacted, it will establish a precedent for similar measures elsewhere.
The Standing Joint Committee invites you"—
the letter refers to me—
to consider that it would be undesirable if this were relied upon before there had been time for a valid judgment of the effectiveness of the assurances which have been given relating to matters of safety, reasonable access and minimal interference with road users in general".
The point is that, of course, people are bound by a vote in this House, but I am glad that Birmingham city council and the RAC, as the leading partner in the standing joint committee, have got together to discuss the matter, and it is right that they should do so.
I want also to comment on other general matters of concern, such as the effects on strategic traffic flows, safety, access, noise and pollution. They are all matters which have worried hon. Members and about which they have rightly expressed concern. The Bill contains clauses relevant to all those matters. Officials of my Department and those of the Department of the Environment and the Home Office have discussed the Bill in detail with the promoters, and several amendments have been incorporated to satisfy our reservations which existed at the earlier stage.
In our view, it would also be unreasonable for the net expense, if there were any, of this local initiative to be met from public funds. Therefore, we sought details from Birmingham city council on the anticipated income and expenditure associated with the race. We have told the council clearly that we expect the project to be self-financing, and have accepted that the estimates provided to us by the Birmingham city council demonstrate that that is indeed feasible. Those matters are important and I have seen it as our duty to ensure that they have been fully considered, and the best possible arrangements made. We are, however, content that the promoters of the Bill, my hon. Friend the Member for Birmingham, Hall Green (Sir R. Eyre), my hon. Friends and some Opposition Members, have worked hard to make sure that they know what is required of them. I am content that the promoters are well aware of their responsibilities, as one would expect from a city with such a civic reputation as Birmingham. I said on Second Reading that this is an exciting prospect and that the Bill is undoubtedly an unusual and adventurous initiative. That is not unusual. We have come to expect

exciting, unusual and adventurous initiatives from Birmingham. There are no reasons for frustrating the city's attempts to promote itself.

Mr. Jeff Rooker: If the Government have such a high regard for the city of Birmingham, why are they financially penalising the city so much that we have been forced to raise rates through the roof?

Mrs. Chalker: rose—

Mr. Deputy Speaker: Order. If the hon. Lady answers that, we shall be getting away from the Bill.

Mrs. Chalker: I am quite ready to answer that point, but I abide by your ruling, Mr. Deputy Speaker. I shall leave it to another day to respond to the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who, unfortunately, has recently been associated with a sludge works—[Interruption]. He is not really associated with sludge works.
The Bill was given a substantial majority in this House on Second Reading, when my hon. Friend the Member for Hall Green made a lucid and open speech. I see no reason for impeding the progress of the Bill. Therefore, I recommend that it be allowed to proceed.

Sir Reginald Eyre: I am most grateful to my hon. Friend the Minister for her positive attitude. I assure her that the city of Birmingham will take full account of and comply with the requirements that she has specified relating to safety, environmental considerations and other such matters.
I apologise to the hon. Member for Birmingham, Ladywood (Ms. Short) for missing the opening sentences of her speech. She raised a number of important points to which I would like to refer.
We had an opportunity to record the main purposes of the Bill on Second Reading on 1 April. It establishes a framework for the creation, in Birmingham, once a year, of a major international tourist attraction for the city and the midlands—a motor race of formula cars through the streets and a parade of historic cars and other attractive events suitable for family entertainment.
The city council believes — these matters were earnestly considered by members of the city council, as the hon. Member for Ladywood knows — that this event would help to promote Bimingham as a motor city. It would encourage the many thousands in the city who are engaged in work connected with the motor industry. From a psychological point of view, it is important to provide that kind of encouragement. The city council has considered the matter very carefully.

Ms. Clare Short: There are two issues—whether it would be desirable to have this road race and whether it would be profitable. At a recent meeting with the leader of the council and some of my hon. Friends, one of the officials went so far as to argue that a road race to promote Birmingham as an international tourist centre would be desirable, whether or not it was profitable. I would be grateful for the hon. Gentleman's view on that.

Sir Reginald Eyre: I accept the importance of jobs and profitability. If the hon. Lady will permit me, I shall try to reply to what she said about those two major issues later.


A list of job creation effects was discussed on Second Reading. I invite the hon. Lady to read those speeches. Perhaps I might ask her to read mine—

Ms. Clare Short: I read it again today.

Sir Reginald Eyre: —because I said that I believe that the event will contribute to job creation in Birmingham.
The hon. Lady rightly said that we do not want to turn all our attention to service industries, but that we want a revival of manufacturing. I share her view. There is no doubt that the future of manufacturing is enormously important to Birmingham. I remind her, however, that the city's competitiveness has improved this year as a result of a revised regional policy. The regional office has received many applications for grants to further the development of manufacturing industry and other businesses. Moreover, the Government recently approved British Leyland's corporate plan. We were extremely pleased in Birmingham, because that was another contribution to our future as a manufacturing city.
I ask the hon. Lady to bear those factors in mind. I agree that it is important to create jobs in manufacturing and to modernise that section of industry. The promotion of the motor industry by this international tourist event would be a gain for people involved with the motor industry in the city.
The project enjoyed overwhelming all-party support in the city council. In November, 90 members voted for it, 13 voted against and there were only five abstentions. As the hon. Lady knows, the Bill received a Second Reading by 202 votes to 68. The city council and supporters of the project hope and believe that the project will cover the capital and revenue costs and generate income which will improve the city's revenue and therefore services.
It is difficult for the House to debate such an assumption for the future, but the city council took much advice and considered the proposition very carefully. It was extremely carefully costed. The basis of the calculation is that, if the council goes for the expenditure of £1·5 million, perhaps over two years, it is likely that the city will receive the benefit of a profit of £1 million—a 40 per cent. return on a business investment. That would be a good return for the city and benefit everyone in the long term. Those are the best estimates we have upon which to base our judgment. I have considered them and thought seriously about the matter and believe that there is a good chance of the city making that profit. I support the Bill because I do not think that the cost will fall on ratepayers.

Ms. Clare Short: Later, I shall move two amendments that seek to secure that the council stays within those economic projections. Will the hon. Gentleman be supporting the amendment?

Mr. Deputy Speaker: Order. We should not anticipate debates on the amendments.

Sir Reginald Eyre: I accept your guidance, Mr. Deputy Speaker. I believe that I shall be able to show a positive response to the main thrust of the hon. Lady's argument. I look forward to considering the amendments. The hon. Lady will also find that stage of the debate helpful.
The Bill was amended in Committee to take account of observations by Government Departments, statutory undertakers, the county council and petitioners. All five petitions were withdrawn before the Committee stage, so

the Bill was unopposed. The city takes full responsibility and will take great care to observe the points of detail that the Minister has raised.
There has been a misunderstanding about the position of the RAC. At Second Reading, the RAC opposed the Bill and motor racing on a street circuit. Following the vote on Second Reading, the chairman of the general purposes committee in Birmingham, Councillor Mrs. Brown, wrote to the chairman of the RAC, Mr. J. Rose, and made it clear that the city wished to work with the RAC to pursue the promotion of motor sport in Birmingham. In reply to Mrs. Brown on 22 May, Mr. Rose said that, having had its view rejected on Second Reading, the RAC would discontinue further opposition to the principle of the Bill and would receive and deal with any application for motor racing subsequent to the passage of the Act in accordance with the published regulations governing motor sport. I accept that that is the duty and responsibility of the chairman of the RAC.
I am happy to say that Mr. Rose offered a meeting at officer level, which was accepted by the city on 6 June. The RAC was represented by its general secretary, the motoring sports chief executive and the race executive. They made helpful suggestions and provided information about the necessary competition and track licences. All those matters are being followed up. I hope that the hon. Member for Ladywood will feel that that reveals a better situation.
The hon. Lady mentioned road surfaces. The city is having further consultations with the RAC—I am glad to say that, following Second Reading, a friendly relationship has been maintained with the RAC—and I am informed that, in the opinion of the RAC, the road surface in Birmingham is satisfactory for racing, especially in the light of experience at Monaco, where racing has not accelerated wear on the surface.

Mr. Robin Corbett: The hon. Gentleman is being too modest about the RAC opinion. Apparently, the RAC believes that the surface of the proposed track in Birmingham is already of a higher specification than that at Monaco.

Sir Reginald Eyre: The hon. Gentleman makes a helpful point, which I believe to be accurate.
It would be much in the interests of our business if we could proceed soon to deal with the new clause in the name of the hon. Member for Ladywood, and the amendments tabled by the hon. Members for Birmingham, Hodge Hill (Mr. Davis) and for Birmingham, Perry Barr (Mr. Rooker). I am anxious to be able to show a positive attitude towards the points that they wish to raise.

Mr. Jeff Rooker: Like the hon. Member for Birmingham, Hall Green (Sir R. Eyre), I wish to get on to the amendments as soon as possible, so I shall speak for only a few minutes. However, we must use this opportunity to discuss what is in the Bill following its Committee stage.
The hon. Member for Hall Green read out a list of people and organisations whose worries had been met, but he mentioned none of the anxieties expressed by myself and some of my hon. Friends when we discussed a number of instructions on Second Reading. I am still unhappy about the fact that the Bill contains no financial provisions. Not one sum of money is referred to.
I mentioned in an intervention — it was a little underhanded, because I suspected that I was out of order when I was making it — that Birmingham faces a massive financial crises. No one can tell us that everything is financially and economically rosy in Birmingham.
On Second Reading, Conservative Members enthused over the municipal Socialism that the Bill represents, but since then the city council has announced a 43 per cent. rate increase and Conservative Members have subsequently spent their time slagging off the city council at every opportunity.
It is one thing to say that the rate increase is no fault of the city council or of the Government, but it is another to ask hon. Members to approve legislation that will result in an impost on Birmingham ratepayers — without mentioning the fact that Birmingham is in a financial crisis. I shall say more about that later, when I shall also repeat that I am still unhappy about the fact that no attempt has been made to secure the external financing which I believe could easily have been obtained.
Some ignorant comment has been made in Birmingham newspapers about my hon. Friends and myself. I take extreme exception to being classed as the sort of hooligan who caused a death at Birmingham city football ground—and merely because I seek to have every stage of the Bill debated. The hon. Member for Hall Green shakes his head, but the Birmingham Despatch said that my hon. Friends and I were like the hooligans at Birmingham city who caused the crowd trouble that led to the death of a football supporter. I take extreme exception to that, and I shall be most annoyed if Birmingham city council spends money advertising in the Birmingham Despatch. The paper made no attempt to speak to us about why we had to object to the Bill recently so that we could secure today's debate.
The proof of the pudding is in the eating. We understand that some of our amendments may be accepted. The hon. Member for Hall Green talked about accepting the thrust of our amendments. We want more than that. We want amendments accepted here, not in another place. There is every reason to believe that financial amendments should be inserted here, not in the House of Lords.
I am glad that clause 21, with its code of practice, was added in Committee. It is only a pity that it was not in the original Bill. Nevertheless, I applaud the Committee and the promoters for their action.
Until about 10 days ago, the promoters and their agents had made no attempt since 1 April to contact my hon. Friends or myself to discuss detailed matters that we were worried about. Therefore, they cannot complain that we tabled amendments to the Bill only recently. We did not know until a few days ago that the Bill would be debated today, and it is no good the promoters saying that they cannot amend the Bill here and that amendments will have to be made in the other place. They knew what we were worried about, and the result was new clause 21.
This will be the only opportunity that I shall have to ask the promotors about clause 22, which was not amended or discussed in great detail in Committee. I do not understand why the city council should not have to obtain the permission of the Director of Public Prosecutions to institute a prosecution. The powers of prosecution that are sought are different from those that are contained in the legislation.
I hope that some of the amendments that are to be debated tonight will be accepted. Their acceptance would improve the Bill. I share the concern of my hon. Friend the Member for Birmingham, Ladywood (Ms. Short). I am worried about the financial implications. If I can be satisfied about them, I shall not oppose the Bill, but we have not yet been convinced about the financial implications and they remain our greatest concern.
The amendments demonstrate that there are other worries. For example, a meeting is taking place now in Birmingham to decide whether or not to proceed with Birmingham's bid to stage the Olympics. I am not opposed to that bid. I have not been asked for my approval or disapproval. It is not a parliamentary matter. However, after the Olympics, Birmingham would be left with many physical assets.

Mr. Beaumont-Dark: They would be liabilities.

Mr. Rooker: The hon. Gentleman says that they would be liabilities. I believe that they would be assets. Those assets would be used by the citizens of Birmingham. Furthermore, many new jobs would be created in order to provide those assets.
We are dealing here not with assets but with a peripheral tourist attraction. This event would take place once a year. The hon. Member for Hall Green made it sound so good financially that I wondered why this event is not to take place every three months. If it is to be such a sure-fire winner and a real money spinner, why not stage the event twice or three times a year? Such an event could be staged at bank holidays.
There remain doubts about whether it would be viable. I need to be convinced that the event will be financially successful. More information needs to be made available. The capital restrictions were not accepted by all members of the council. It was not a unanimous decision. Therefore, it is unreasonable to expect hon. Members to come to a unanimous decision. If councillors are so certain that this will be a money spinner that they wish no capital restrictions to be written into the Bill, there ought perhaps to be an amendment requiring them to make a contribution if a loss should be made. However, we have not gone that far.
We do not wish to be unreasonable. Those hon. Members who seek to impose financial control over the exercise have made compromises. Those compromises take the place of many amendments that we would have moved had we not been prepared to compromise. Having made compromises, during the evening we shall expect firm evidence, in the form of acceptance of certain of these amendments, that the promotors are also willing to make compromises.

Mr. Snape: Does my hon. Friend accept that if the financial projections of Birmingham city council prove to be correct, the hon. Member for Birmingham, Hall Green (Sir R. Eyre) and his hon. Friends will be trooping through the Division Lobby to privatise the event within three years or so?

Mr. Rooker: That thought had not crossed my mind.

Mr. Beaumont-Dark: I thank the hon. Gentleman for his suggestion.

Mr. Rooker: The idea had clearly not crossed the mind of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) who has just thanked my hon. Friend the Member for West Bromwich, East (Mr. Snape) for giving him the idea.
If this project goes ahead, we wish it to be successful. Nobody wishes it to be a failure. However, it should be proceeded with only if there is sufficient evidence that it will be successful or if there is sufficient evidence that the private sector will be prepared to put its hand in its pocket to provide support. The private sector will benefit from it, as the hon. Member for Hall Green made clear on Second Reading.

Mr. Anthony Beaumont-Dark: It is sad that this further bold venture from Birmingham has met with opposition—forgetting the interested parties representing other race tracks—from only three hon. Members with Birmingham constituencies. It is a pity that they all happen to be members of the Opposition, particularly as the city council—alas and alack Labour-controlled—is now in favour of the event. I do not doubt the motives of these hon. Members. It does not behove anybody in public life to doubt people's motives for opposing something and I know that the views of the three hon. Members are honourably held and have been honourably put forward.
However, as somebody who was involved in the local government life of the city of Birmingham for over 20 years, I have to say of some of the arguments of the hon. Member for Birmingham, Ladywood (Ms. Short) that I remember hearing them loud and clear from those of faint heart who thought that instead of money being spent on one project or another it should have been spent on the repair and maintenance of tower blocks, expenditure which is of course necessary, or upon schools, expenditure which is also necessary. I do not doubt the heart of the hon. Member for Ladywood because she cares for her constituents and for the city, as do we all.
When we debated all those years ago the spending of a much greater sum of money on the National Exhibition Centre, to which project two Governments gave valiant support, the sum of money involved was much larger. It amounted to £26 million, and eventually the project cost £42 million. Harry Whatton, Frank Price, Sir Frank Griffin and I said that we should probably end up in the tower if it all went wrong. However, Birmingham and all other cities have to take risks with their ratepayers' money. Of course they have to think carefully before they risk that money, so to risk £40 million was a tremendous gamble.
A good case could have been made out for spending that money upon the infrastructure, roads and old people's homes, but the result of the venture was a new airport, a new international station, a new road link and new hotels, restaurants and jobs. It has resulted in new hope and in a new vision of what the city of Birmingham is. That was what was involved when we took that great decision on the Sunday morning when the contract was signed. Had the risk we then took gone wrong, heads would have rolled.
As the hon. Member for Birmingham, Perry Barr (Mr. Rooker) rightly said, the reason for only modest representation from the political parties of Birmingham is that tonight they are considering another great venture, in which far larger sums of money are involved than was the case with the National Exhibition Centre. About £500

million will be involved if the Olympics are staged in Birmingham. Whether or not the Olympics come to Birmingham, and whether the city is controlled by a Conservative of Labour city council, the city moves best when it moves as a united team upon such ventures. I hope that if we can overcome the niggles we can move upon this venture. It may not be a great success, but I believe that Birmingham has a knack of making such things successful. The sum of money involved is small but it will attract business and people to Birmingham.
Rates have been mentioned but I do not wish to join in the controversy tonight about whether rates should have been increased. When we talk about the future of Birmingham we should not consider the problems of today but rather the direction we wish to see Birmingham take.
If one discounts rate rebates, those who pay rates will include business people large and small. They will pay for the future of our great city. It is correct to risk ratepayers' money to help people build a vision and create new hope for the city of Birmingham. It is not Government money, it is the people's money. That is why I am glad that the RAC, which I thought acted badly previously, though its motives may have been for the best, has relented and given us its support.
If one sets out on a venture one must believe that it will be successful; otherwise one would be wasting the time of the House and its servants on discussion. I believe that Birmingham is right. This is a good venture and once we have got over the niggles—the matter of half-price tickets for Birmingham citizens is not a crucial issue—and we can set at rest the genuine anxieties of hon. Members we can proceed with this or like ventures because, as the hon. Member for Birmingham, Ladywood said, Birmingham needs a lift.
My hon. Friend the Member for Birmingham, Hall Green (Sir R. Eyre) mentioned the BL plan which, last week, we all agreed was a huge uplift for the city of Birmingham and for the west midlands. We should not damage Birmingham's prospects by letting those who decide Birmingham's future think that we are disunited on this matter, the Olympics, or some future venture, as we were in the past on the NEC.
It is our city, and our future should be in our hands. If we can reach a united decision tonight, our bid for the Olympics might be looked upon more favourably because we act as a united Birmingham. Labour or Conservative control does not matter. The future of our city does. It is the future of Birmingham that matters, regardless of whether the Conservatives or Socialists control it. We should vote on this tonight as a united team.

Mr. Terry Davis: During this debate the hon. Members for Birmingham, Hall Green (Sir R. Eyre) and for Birmingham, Selly Oak (Mr. Beaumont-Dark) have said that the Bill would create jobs. Such arguments sound strange from the lips of hon. Members who support a Government who continually cut public expenditure. I accept that public expenditure creates jobs. My objection to the Bill is not that it involves public expenditure but that it involves expenditure on a motor race instead of more worthwhile projects. Those hon. Gentlemen speak of the expenditure of £1·5 million of capital allocation on a motor race and support it on the grounds that it will create jobs. I am amazed that we have heard nothing from them at any time about the reduction


of £40 million in capital allocation to the city of Birmingham this year. That money would have created far more jobs than a motor race. 
It is clear that the hon. Member for Hall Green does not know how many jobs would be created by the motor race. I can tell him because I raised the point with Councillor Marjorie Brown, the chairman of the general purposes committee. She told me that the expenditure would only create "up to 20 jobs". In fact she said that the clerical work to be done would involve up to 20 extra members of staff for the city council.
The issue is not whether public expenditure does or does not create jobs. I argue consistently in all economic debates that it does create jobs.

Sir Reginald Eyre: I take the point that the hon. Gentleman makes. If the event is held and attracts the flow of visitors and the expenditure that has been taken account of, all that activity creates the prospect of further employment in a wider sector.

Mr. Davis: The hon. Gentleman has taken my bait. I raised that point with Councillor Brown and she could give me no estimate—I was willing to accept any rough estimate or guesstimate—of how many jobs the city council thought would be created as a spin-off from the motor race. I would not have argued. I just wanted a figure. There would be jobs. Some of them would be temporary such as selling programmes and hot dogs. Some of them might last longer than the weekend and be in hotels and restaurants. Of course there would be some extra jobs. But the answer was that the council did not know and the Bill's promoters do not know how many jobs will be created by the activities to which the hon. Member for Hall Green drew our attention.
I am not opposed to the creation of jobs. On the contrary, I argue for that in all our debates in all contexts, unlike the hon. Members for Hall Green and for Selly Oak. I accept that some jobs will be created and that some profits will be made at the same time. That is why some of the businesses in Birmingham want the Bill. They want public expenditure so that they have the opportunity for private profit.
The point is not whether we spend £1·5 million; it is whether we spend it on a motor race in preference to other activities, or projects. That is the point. Capital expenditure creates jobs. It is not only the motor race. Other forms of capital expenditure also create jobs. I am not arguing for a reduction of £1·5 million in the council's expenditure. I am arguing and I have consistently argued for that £1·5 million to be spent on other things.

Mr. Beaumont-Dark: I am happy to be another fish and to accept the hon. Gentleman's bait. We can, of course make out a long shopping list of things on which to spend money. As I hope I said, to spend £1 million on infrastructure or repairs may create more jobs than this project. Which does the hon. Gentleman think will attract more and better publicity for the city of Birmingham and attract people and make them believe that Birmingham is a go-ahead city? Does he think that people would be inclined to give us greater publicity for having a good and successful race or for £1 million spent upon sewerage, although the one may be essential? Do we not sometimes have to raise our minds from the temporary for the greater good in the longer term?

Mr. Davis: I accept the thrust of the hon. Gentleman's argument. We shall be using that word a great deal this evening. That is why I am favourably disposed towards a Birmingham bid for the Olympics. I think that that would do a great deal for Birmingham. But I should prefer people to take away a better image of Birmingham as a result of the expenditure of £1·5 million on some projects that I shall mention later instead of a motor race. I believe that they would have a better image of Birmingham if the money were spent on these projects rather than on a motor race.
The fact that tower blocks are fenced off because of the danger of blocks of concrete falling on people and the fact that Birmingham contains many Smith houses which are crumbling round the ears of the people living in them because the city council has no money to do anything about these problems do not do Birmingham's image much good.

Ms. Clare Short: What would be the impact on Birmingham's image if a foreign tourist went past one of these tower blocks, a lump of masonry fell on his head and he was severely injured?

Mr. Davis: Of course that would be a disaster. I do not think that it is likely to happen, because the council has fenced off many of these tower blocks.
The hon. Member for Hall Green argued that the race would be self-financing. I do not believe that he appreciated the force and strength of our belief in priorities. For the purposes of this debate, I shall accept the figures that have been cited by the city council. This is an argument not about whether the race is self-financing but about the items on which the city council should spend money under the capital allocation. The Minister of State also argued that the race would be self-financing. I do not believe that she has understood the point that it is capital expenditure. It is not a case of spending the people's money, as the hon. Member for Selly Oak put it. The money will be borrowed; it will not be raised from the rates as revenue expenditure.
For what should the city council borrow the money? On what should the council spend it? According to my understanding of the way in which capital expenditure works, the Government restrict the amount of money—they call it an allocation—that the city council can spend on capital expenditure. The Government leave it to the council to decide on what that money is spent, but they control the amount borrowed and the amount that the council can use from its capital receipts. The Government therefore restrict Birmingham's total capital expenditure.
In a letter to me, the chairman of the general purposes committee of the city of Birmingham said:
you are quite right in saying that this will come from capital allocations—although the phasing of the expenditure by financial year is still uncertain.
The city treasurer confirmed this in a note circulated to other hon. Members, including my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell). He said:
Since total local authority spending on land, buildings, roads etc. is controlled by the Government, by spending allocations and restrictions on the use of capital receipts, the initial road alterations and setting up costs would count against City spending limits and would utilise resources which otherwise could be spent on other City services.
Let there be no misunderstanding: it is a question not of the total amount of capital expenditure but of priorities.
In January, hon. Members received a letter from Councillor Dick Knowles, the leader of the city council. His letter complained about the Government's restrictions on Birmingham's capital expenditure. He attached a briefing note that had been prepared by the city treasurer and mentioned all the items—some of which were mentioned by the hon. Member for Selly Oak—on which the city council would not be able to spend as much as it needed in the coming year. These vital items included council house building, even for the elderly and disabled; structural repairs to dangerous high-rise blocks which were being fenced off; improvement grants; work to replace inadequate outside school toilets and essential fire precautions work. That is not my shopping list; it is a list of items that will be in jeopardy because of the Government's restrictions. That is why I and my hon. Friends, especially my hon. Friends the Members for Birmingham, Perry Barr (Mr. Rooker) and for Birmingham, Ladywood (Ms. Short) object to the Bill.
The Minister of State says that it is up to Birmingham city council to decide its priorities, but we are being asked to endorse them by our votes. That is why we are entitled to object. My hon. Friend the Member for Perry Barr put his finger on the central point when he said that money was our greatest concern. Our sense of priorities differs from that of the hon. Member for Selly Oak. That is not surprising. It is one reason why we are in different political parties. We want the money to be spent on those items to which I referred.
This morning, I received a letter from the city council and this afternoon I had discussions with a council officer. I have not been able to consult my colleagues because these events have taken place during the past few hours. The city treasurer's department has now come up with an ingenious scheme. It does not contain everything we have requested. It will still involve the city council using £1·5 million of its capital expenditure allocation for the motor race. The scheme does, however, go a long way towards meeting our objection on the ground of priorities. Our objection concerned the once-and-for-all use of that money for a motor race. However great the profit, it cannot be used for capital expenditure. The scheme proposed by the city treasurer's department would enable us to meet the priorities about which my hon. Friends and I have such strong feelings. The arrangements proposed by the council are much closer to us than the council's previous position, and it has been made clear to me that these proposals at the eleventh hour are the direct result of our refusal to allow the Bill to pass on the nod and of our meeting with the leader of the city council last Thursday afternoon. I urge my colleagues to accept the council's serious effort to meet our objection on capital expenditure priorities.
That still leaves several defects in the Bill, which are covered by the amendments that we have tabled on many aspects, including finance. We shall want to press those amendments to debate and possibly to a Division if they are not accepted by the hon. Member for Hall Green.
The hon. Member for Hall Green said that he accepted the thrust of some amendments and referred especially to some of mine. As my hon. Friend the Member for Perry Barr pointed out, the hon. Gentleman will have to do much more than that. For example, he will have to find a way of accommodating amendment No. 4, which has not been selected for debate. As drafted, the Bill says that the city council will liaise with Birmingham district health

authority, but there is no such body. There are five district health authorities in Birmingham, and none of them runs the ambulance service, which is one of the aspects on which there is supposed to be liaison. I suggest that my amendment, which refers to the West Midlands regional health authority, is an essential amendment if this is to be sensible legislation. My amendment has not been accepted by Mr. Speaker for technical reasons, which I understand. The hon. Member for Hall Green should find a way of amending the Bill, perhaps in the other place. The trouble is that, because the Bill is badly drafted, it will have to be amended in the other place and return to the House of Commons to enable hon. Members to consider the amendments.

Mr. Rooker: The technicalities of private legislation differ from those of public legislation. Is the reason why my hon. Friend's amendment was not selected the fact that he could not show evidence that he had consulted Birmingham district health authority, to which he was referring? I freely admit that I did not consult the Birmingham Despatch. That was a quid pro quo. How could my hon. Friend consult Birmingham district health authority? If this is the difference between the two sides of the House, surely a manuscript amendment or a change in Mr. Speaker's decision would accommodate my hon. Friend's wishes.

Mr. Deputy Speaker (Sir Paul Dean): Order. Hon. Members are getting a little wide of the debate. I realise that the House wishes to discuss whether the Bill should be now considered. The hon. Member for Birmingham, Hodge Hill (Mr. Davis) has begun to refer to an amendment that has not been selected. I am sure that he appreciates that it would not be appropriate to discuss that amendment. I am wondering whether the House wishes to move on fairly soon to the amendments that have been selected.

Mr. Davis: We are discussing whether we should consider a Bill that is defective. From the expression on the face of the hon. Member for Hall Green, I think that he has had urgent discussions with the city council as a result of my amendment and others. He has learned that there is a defect in the Bill. It is a pity that it was not put right before.
Perhaps the hon. Member for Hall Green will rise to suggest that we should now defer consideration of the Bill to enable us to amend it properly in the House of Commons. I am not putting words into the hon. Gentleman's mouth, but that is the point that I was seeking to make.
Clearly we shall consider the Bill this evening because the hon. Gentleman has not risen to his feet. We shall consider a defective Bill that will have to be amended in the other place and will have to come back to the House of Commons.
Meanwhile, we shall seek to amend the Bill to enable it to go forward as a much more sensible Bill than it would have been if we had not objected to its passage on the nod a fortnight ago.

Mr. David Ashby: I was not able to catch your eye, Mr. Deputy Speaker, on Second Reading. I am surprised that so many of my hon. Friends are still so keen on the municipal as opposed to the private sector being involved in the race.
Many of my constituents are ratepayers of the city of Birmingham. Some are in the unfortunate position of being ratepayers who do not have a vote—in the business and commercial sector. They are very concerned about the Bill. Therefore, there are some matters that I wish to raise at this stage in the hope that something can be done and that some consideration will be given to those points.
Before I refer to those matters, I should like to say something about the RAC, of which much mention has been made, because I have spoken to its representatives on many occasions about the Bill. Their position may have been misrepresented unwittingly. As we know, they were opposed to the idea of a road race on public roads. They were very concerned about the precedent and about races taking money from the private sector, where a great deal of capital had already been spent. On the other hand, as very good servants of this country and as people who watch carefully what happens in Parliament, and bearing in mind Second Reading, they realised that they should co-operate and enforce the rules and regulations to the best of their ability. To say that they are in favour is being unfair to them. They are not. The RAC is the governing body of motor sport, and it is therefore beholden to the sport, the country and the views of Parliament, and to do its best in a situation in which they disagree. I know that the RAC has been co-operating and that it will continue to do so. However, I wanted to put that matter straight.
A few points cause me a great deal of concern. The first concerns clause 5, on the restriction of traffic. The proposed route for the race covers 2·5 miles, involving parts of 45 roads bounded by a mixture of commercial and industrial and residential premises. The Bill empowers the council to close off the roads and to restrict access to any part of them between 9 am and 6 pm on the day of and the day preceding the race. That could create havoc for some commercial premises to which goods must be delivered and received.
We appreciate that trade and commerce do not grind to a halt just because of a bank holiday in England, especially as bank holidays abroad do not necessarily coincide with our bank holidays. Therefore, the powers of access granted in the Bill are not sufficient, especially considering the inconvenience of even setting up the barriers and taking them down, apart from inconvenience during the race itself.
We must appreciate that the race is to take place not on a field miles from anywhere, but in the commercial heartland. I am disappointed about that aspect of the Bill. I hope that if it goes to the other place, further consideration will be given to the point that I have raised.
The other points that I should like to raise are more fundamental and go to the heart of much that I have spoken about and believe. Clause 16 deals with damage to property. The Bill provides that entitlement to damages from street closure or barrier erection is to be calculated under provisions laid down in the Land Compensation Act 1961. Under that Act, disputed claims for compensation go to the land tribunal rather than directly to the courts. That is something like a court of law. But in such cases, should not any disputes go directly to the High Court, especially since they may involve both physical loss and commercial financial loss of large sums of money? In the eyes of the public, such a crucial case would be accredited

with greater legitimacy if it was heard in the High Court. Why should a business action for tort not be available? Why should this procedure supplant a business action for tort?
The Bill states that damage claims must be assessed in the light of any gain to the plaintiff that the holding or the prospect of holding a motor race would give. Who will decide who gains or what those gains are? That is an unfair penalty on business interests. We must appreciate that under the Bill there will be confiscation of property rights for a time, possibly without adequate compensation.
There is another aspect that we must consider—the duration of validity for damage claims, which comes under clause 16(5). The clause provides that a period of only 12 months elapses before any claim for compensation falls. That is absolutely ridiculous. Why should Birmingham arrogantly give itself preferential treatment? After all, the limitation period in any other business is a good deal longer. It is six years. Why should Birmingham have 12 months? We must consider why it is six years. In certain trade and international commercial circles 12 months would be an insufficient time to make any assessment of the true extent of the damage incurred. That is a very important point. It is absolutely fundamental.

Mr. Rooker: The hon. Gentleman is making a meal of the matter. I do not like the way in which he is attacking Birmingham. Surely the reason is obvious. Birmingham wants to get the claims for one race out of the way and legally settled before the second race. That makes sense. Otherwise, it would be impossible to administer.

Mr. Ashby: One will not know whether the race has been run at a loss or a profit until one has got the claims out of the way. That may well be the point. That may be the reason for 12 months. After all, a substantial claim could turn a profit into a loss—perhaps a substantial loss. However, not only commercial interests but residents are involved. Why should those people be in a different legal position from the rest of the country? Why should they not have the same legal rights as the rest of the country? Why can they not go to the same courts, have the same limitation period, and make the same claims as the ordinary person?

Sir Reginald Eyre: With respect, I think that my hon. Friend has not taken full account of the deliberations of the Committee. Special provisions with regard to liability affecting Birmingham were made, which took it into a special category, part of which my hon. Friend mentioned. But the total balance is very much in favour of anyone who is injured. I think that that was a proper liability to place upon the corporation in these circumstances. It will, of course, be met by insurance. I think that, under the total scheme, the balance of advantage is with the person injured.

Mr. Ashby: I have not seen that. Why should Birmingham be given such preferential treatment in the courts above and beyond everyone else? The courts exist to protect ordinary citizens, and every citizen should have the right to go to court. I hope that my points will be given thought elsewhere because the position is alarming and goes far beyond the Birmingham City Council Bill.
I find another aspect equally alarming. Clause 5(7) allows the police to arrest any individual found without reasonable excuse in any street closed for the event. Under


the Bill the police will have the defence of taking all reasonable precautions. The Bill creates an offence, and I can see the scenario that will develop. A person with important commercial interests who requires to reach his premises will be refused access by a police officer. That person will say, "I must pass through. I have an important item to deliver to the premises." That may happen not on the bank holiday, but on the preceding day or one of the other days when the streets are closed. Then the poor fellow will be arrested, taken before the courts and fined. Only a fine is permissible under this clause. He will be extremely angry because he will have been denied access to his premises to carry out his business. He may refuse to pay—many people refuse to pay fines—and he will then be sentenced to 14 days imprisonment. That is the scenario that will arise because fundamental rights are denied under the Bill. That is a serious aspect, and it must be considered. A new offence is being created.
Equally alarming is clause 12, which deals with the compulsory purchase of land rights. The Bill gives Birmingham city council draconian powers to acquire property rights on specific land for three days before and after the day of the event, if agreement cannot be reached with the owner. I have spent most of my political life fighting against compulsory powers and for the rights of the individual. This clause fills me with horror. We are taking property rights away from the individual. There is no appeal, because this is a compulsory acquisition of property rights. In other similar cases there have been inquiries. An independent inspector has to listen to both sides and make up his mind whether the powers that have been sought are good or bad, sensible or nonsensical. After that, the matter goes to the Minister for his agreement. That happens in every other case of compulsory acquisition of land rights. However, there is no provision for that in the Bill. The powers are draconian. No other body has them in peacetime. I can imagine those powers being made available in wartime regulations, but not in peacetime.
It is monstrous that Birmingham should be given these added powers, that there should be no appeal, no independent inquiry and no safeguard for the individual. The Bill removes individuals' rights substantially in the name of a jolly good day's entertainment on the municipal rates, and without regard to the people who will be affected by the race being staged on their roads. The very people affected are having their rights taken from them. I hope that my points will be considered, because they are vital.

Mr. Peter Snape: I wish to refer in particular to the speech by the hon. Member for Leicestershire, North-West (Mr. Ashby). At the beginning of his speech I wondered how many of the hon. Gentleman's constituents either live or work in Birmingham.

Mr. Ashby: One thousand.

Mr. Snape: I heard him when he mentioned it in his speech. He has spoken for 15 minutes and I hope that he does not wish to speak again now.
Like most of my hon. Friends, I see no particular reason why people who live in north-west Leicestershire should vote in council elections in Birmingham.

Mr. Ashby: They do not.

Mr. Snape: The hon. Gentleman keeps re-emphasising points to which I listened. I am well aware that his constituents do not vote in Birmingham council elections. My point is that I see no reason why they should. It is difficult for me to speak because I am a non-Birmingham Member of Parliament. However, I can claim to be a Birmingham ratepayer and, therefore, I have some direct interest in how my money is spent. Regrettably, I am not yet represented by any of my hon. Friends, but I hope that some time in the future I shall be.

Mr. Terry Davis: Who did my hon. Friend vote for?

Mr. Snape: Regrettably, I was not in Birmingham during the general election, but I promise to vote Labour next time.
My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) pointed out the inconvenience that her constituents will suffer if the road race goes ahead. I, too, have many constituents who live in tower blocks and who, like her constituents, wish to leave them as quickly as possible. Although I do not know my hon. Friend's constituency as well as she does, I hope that she will accept that I know a little about it. This morning I passed through part of it, and I hope that she will agree that the environment of her constituents with the present road traffic using the roads on which it is proposed to run the race is hardly the best in the country. I put it no higher than that. Perhaps she could tell the House what her constituents' views would be about the difference between the non-stop stream of heavy goods vehicles which pass through the centre of Birmingham at present on these roads, and the road vehicles that will pass down those roads if the Bill is accepted. I would not have thought that the intrusive aspect of a road race would be much greater than the nightmare that most of them must put up with at present.

Ms. Clare Short: We are told by an expert report that the noise from the road race will at times be deafening, but brief. Obviously, that is much more intrusive than normal heavy traffic during the day. However, that was not my major point. It was that the money that is being spent on the road race could be spent on desperately needed repairs to the tower blocks that surround the racing circuit.

Mr. Snape: I realise that. My hon. Friend will, however, acknowledge that £1,500,000 will not go far towards those much-needed repairs. As the Member of Parliament who represents the constituency adjacent to my hon. Friend, although outside the city of Birmingham, I hope that if millions of pounds are flying around, some will be allocated to my constituency. The point made by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) is central to our debate. I speak only for myself when I say that I would find difficulty in, on the one hand, waging a political battle for greater local government autonomy, and on the other telling an elected city council whether it can spend a small proportion of its overall budget. I was a member of a local authority, as were many of my hon. Friends, and for some time I was chairman of the finance committee. The allocation of finance and the division of any council's resources is often a hot political potato. Indeed, sometimes it is a hotter political potato among members of the same party than it is in a council where all the political parties are represented. When I did that job, I would not have wanted the House to decide those financial priorities for me.
The Labour party has waged the battle that it has on the Local Government Bill because the Government wish to centralise the decisions of local authorities. Again, I stress that I speak personally, but I support the right of Birmingham city council to decide its priorities. I represent a constituency adjacent to Birmingham and within the borough of Sandwell, and I can tell the House that such arguments and controversies are nothing new in my borough. We run an annual historic vehicle parade for which it is necessary to close some roads. The parade was started by two people about seven years ago, but because it was so successful, Sandwell council became directly involved and now contributes financially to the project. During the years, there has been some criticism within the borough and on the council about spending money in that way.
I have another interest to declare, in that it is extremely worrying that each time I see the historic vehicle parade, I realise that I used to travel on most of the buses on parade. The allocation of a small part of the council's resources often causes controversy in the borough. I do not always agree with the council's decisions, but I believe that the allocation of resources is better left—

Mr. Terry Davis: rose—

Mr. Rooker: rose—

Mr. Snape: I cannot give way to both my hon. Friends. Perhaps they can decide between themselves who will cast the first stone. The allocation of those resources should be left to the local council. That is why, on the previous occasion when this Bill was before the House, I could not support my hon. Friends.

Mr. Terry Davis: My hon. Friend has made it clear that he is speaking for himself. However, does he understand that there is a difference? Here we are being asked to vote on the priorities because we must vote on a Bill. It is not a case of leaving the decision to the council. We are being asked to endorse or vote against its priorities. I must tell my hon. Friend that four of the six Birmingham, Labour Members of Parliament do not regard themselves as rubber stamps for the council.

Mr. Snape: Of course I accept that. However, I should point out that the Government are seeking a change in the law because they do not believe in the autonomy of local government.

Mr. Davis: It is not the same thing.

Mr. Snape: It is exactly the same thing. Of course, four of the six Birmingham Labour Members of Parliament must make up their minds and vote accordingly on this Bill, as on any legislation. I make no complaint about that.
However, the city council recently commissioned an eminently reputable organisation—Market and Opinion Research International, which the Labour party uses for its opinion polls—to conduct an opinion poll into what people thought about decision-making at local level, the accountancy procedures of the council and the way in which their money is spent. The result of the poll will bring no comfort to Conservative Members, who troop continually through the Lobby to restrict the powers of local authority expenditure. The poll states:

Even among those who believe the Council, not the Government, is more to blame for rate rises"—
that is a very small proportion of the citizens of Birmingham—
over twice as many say the Council (62 per cent.) rather than the Government (28 per cent.) should be mainly responsible for how much the Council spends.
The people were not asked whether the Opposition should play a part in decision-making. The result shows that the ratepayers of Birmingham, regardless of their political affiliations, believe that those decisions are best made at city council level. I agree with them.

Mr. Rooker: I should be interested to see that document, because none of us has received it. I do not know why that should be so. Perhaps the hon. Member for Birmingham, Hall Green (Sir R. Eyre) has a copy. Does my hon. Friend believe that it should be a matter of local government choice to have racing on the public highway? That is what the Bill is about. If it was possible for a council to decide to close the highways and to have racing on them, they would not need a Bill. No one is arguing about the priorities of choice among the heads of expenditure within the competence of the city council. It is not within the competence of Birmingham city council to close the public highway for racing. That is why it must come to the House for permission. That is why we are asking some questions about the financial arrangements. There is nothing wrong with that, and I cannot understand why my hon. Friend has this holier-than-thou attitude on this matter. We are not attacking local democracy. It is simply not within the competence of Birmingham city council to do as it wishes in this respect.

Mr. Snape: I should be grateful if my hon. Friend would not shout at me, because that does make a valid point better. If we cannot conduct this debate without going for each other's throats, at least verbally, we are in a bad way.
As to my hon. Friend's first point, I do not know how the document was distributed. I received it only today, and I have no idea whether other hon. Members received copies. It is entitled, "Residents' attitudes to Birmingham city council", and it is a research study conducted for the council by MORI.

Mr. Rooker: Where did my hon. Friend get the document from?

Mr. Snape: I got it from the city council today. I thought that I had made that plain. My hon. Friend, who is a fellow ratepayer in Birmingham, is welcome to take the document with him at the end of the debate. There is no reason why it should be kept secret and, as far as I am aware, it has not been.

Mr. Rooker: I have never heard of it.

Mr. Snape: I do not wish to labour the point. There is the document; if my hon. Friend wishes to read it, he can take it with him at the end of the debate.
My hon. Friend's second point was that the controversy is about road closures rather than financial matters, but that is not what my hon. Friend the Member for Hodge Hill said. I do not complain about what he said, but he and my hon. Friend the Member for Ladywood both said that this is a question of financial priorities and that, rather than spend £1·5 million on a road race, they could find—we


all could—better purposes for the expenditure than the city council has chosen. That is a different point from the one made by my hon. Friend the Member for Perry Barr.

Mr. Rooker: Will my hon. Friend give way so that I can clarify this point?

Mr. Snape: No. We shall come to the amendments in a moment or two, and no doubt my hon. Friend will wish to speak again. My hon. Friend the Member for Ladywood refused to give way to me twice the last time we debated the matter.

Ms. Clare Short: Will my hon. Friend give way?

Mr. Snape: No. We shall reach my hon. Friend's amendments in due course. One of the amendments concerns half-price tickets for those wishing to watch the race. I shall vote against that proposal because it is unfair. I shall directly benefit from such a provision, but others will have to pay twice as much to watch the race.
I do not know whether the city council is right in its suggestion on the tourist aspect. The council must make its own decision. I find some contributions by my hon. Friends vaguely off-putting because they claim to be concerned about the future economy of the city. When one considers what has happened to that economy in the last six years it is ridiculous to suggest that the scheme could go even a fraction of the way to replace the jobs lost in manufacturing industry in Birmingham and the black country. Any impact that the scheme could have on the economies of Birmingham and the surrounding area is at best marginal. It might even cost money.
My hon. Friend the Member for Perry Barr was anxious to persuade members of the local authority to stand the financial loss if that were necessary. However, he has said that that is unacceptable to the city council and that therefore he would not proceed with that suggestion.
We are talking about a decision by a majority on the city council. That is not good enough, although I know that some of my hon. Friends do not agree with me. The Bill received an overwhelming majority on Second Reading. That leads me to believe that I should support the Bill as I did then.

Mr. Deputy Speaker: I remind hon. Members that there are five amendments and that time is short.

Dr. John G. Blackburn: I shall take note of your guidance, Mr. Deputy Speaker, and my remarks will be brief.
Throughout the Bill's consideration two important features have been prominent. The first is the closing of roads, and the second the financial stricture relating to the rates. I represent not a Birmingham constituency but a constituency in the heart of the black country. I am able to tell the House that there is a tremendous amount of support for the Bill in the black country. The hon. Member for West Bromwich, East (Mr. Snape) is in the same position as I am, in that we are not contributors to the area in rateable terms, but we both support the event.
The closing of roads takes place in all areas for all sorts of reasons, particularly in the summer. The contribution of my hon. Friend for Birmingham, Selly Oak (Mr. Beaumont-Dark) was saturated with wisdom. He gave us the vision of what happened some years ago when Birmingham's city fathers took the decision about the national exhibition centre. I spent three years involved in

the construction of the NEC and the buildings attached to it. It is a jewel in the crown of the west midlands. I believe that the events that we are debating tonight will be another jewel in the crown.
I am prompted to say that because another city has roads which are closed once a year. They are closed so that a race might take place. If one asked the people of Liverpool, "Why do you close the roads?", they would say "Because we are able to have an international event which is well renowned. You can speak to people throughout the world and mention Melling road and they know what you mean."

Ms. Clare Short: What is it?

Dr. Blackburn: It is not up to me to educate the House. Because roads are closed by Act of Parliament, the Grand National steeplechase can take place at Aintree. That is a tremendous source of income for Liverpool. Equally, this evening represents an historic occasion. Closing roads in Birmingham will have the same historic success, and I wish the Bill godspeed.

Question put and agreed to.

Bill, as amended, considered.

New Clause 1

DURATION OF ACT

'(1) The powers of this Act shall cease to have effect if the profit income to the City from the road race does not exceed the annual revenue and capital repayment costs by 1991.

(2) Separate accounts shall be published each year on the exercise of powers under this Ace.—[Ms. Clare Short.]

Brought up, and read the First time.

Ms. Clare Short: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this we may discuss the following amendments: No. 7, in clause 4, page 5, line 24, at end add—
'(3) The powers of this Section shall be exercised after the Council has arranged external financial sponsorship to cover its capital expenditure involved in providing motor races.'
No. 16, in clause 9, page 8, line 39, at end insert—
'(3) The powers of this section and section 4 shall not be exercised if the capital expenditure to be incurred in 1986 exceeds £1,700,000'.

Ms. Clare Short: The purpose of the new clause is to hold the council to the financial projections that it continues to put before us to justify the road race. We are in a quandary because, whenever we ask how the finances will work, we are given a set of figures which show that £1·5 million capital expenditure will be involved initially, that £1·5 million revenue expenditure will be involved each year that the race is run and that the returns for the city will at best be £2·5 million and at worst will cover costs. Nothing in the Bill holds the city council to those projections. It will be possible for the council to spend considerably more and to receive considerably less, and never have to do anything about it.
As I said during the speech by the hon. Member for Birmingham, Hall Green (Sir R. Eyre), at a meeting recently with the leader of the city council, one of the officials argued that even if the road race were not profitable it might be desirable for the city because a road race might make Birmingham as famous as Indianapolis. That was an extraordinary comparison. I know nothing


about Indianapolis except its name. Birmingham is Britain's second city and the place where the industrial revolution began. It can already claim more fame and glory than Indianapolis.

Mr. Beaumont-Dark: Does not the hon. Lady think that there is something vaguely insulting in suggesting that the city of Birmingham—which manages to handle hundreds of millions of pounds of expenditure each year and look after, as is its duty, more than 1 million people—really needs this House to act as a nanny and tie down the city to a sum of money? Would it not be better for it to decide for itself? Does this House think that it can take Birmingham's place and do its job for it?

9 pm

Ms. Clare Short: It is extraordinary that the hon. Gentleman belonging to the Conservative party, has the cheek to stand up and say that. Since 1979 we have lived with his party constantly taking away financial powers from local authorities and tying them down in the way in which they can spend money.

Mr. Terry Davis: I have visited Indianapolis and I would not want to live there.

Ms. Clare Short: I am grateful to my hon. Friend.
There are two views. It is not simply a matter of trying to tie down the city of Birmingham on how much it can spend on a road race. Underlying the amendment is a policy decision on whether it is worth while Birmingham having a road race that does not cover its costs.
The purpose of the new clause is to require the city to cover its costs, but to give it five years to do so. It should be acceptable to anyone other than those who, like that official, want to argue that the road race is worth while in any event. It is a fairly low level race. The number of international visitors who will go to Birmingham to attend the race has been exaggerated and will be nothing like the number that would be attracted to the grand prix that Birmingham thinks it will get but will not get. It is an entirely reasonable clause. Indeed, yesterday I received a letter from the leader of the city council intimating that it might be acceptable. I do not doubt that the hon. Member for Hall Green will give us a detailed account of the city council's attitude to it. I shall listen to him with considerable interest. As matters stand, I shall seek a vote on it.
The second part of the new clause seeks information for the people of Birmingham on the amount of money involved each year—the cost of the race and the money being returned—which will enable them to exercise their democratic rights through local elections and in discussions and to determine whether the road race is costing them money or bringing money to the city.
Amendment No. 16 is a different amendment with a similar purpose. It refers specifically to capital expenditure. In the estimates that we have been given, the city council says that there will be an initial capital expenditure of £1·5 million and thereafter £1·5 million revenue every time that the race is run. As my hon. Friends the Members for Birmingham, Perry Barr (Mr. Rooker) and for Birmingham, Hodge Hill (Mr. Davis) made clear, capital expenditure in Birmingham is very short because of the limitations that the Government have imposed on

the right of Birmingham to spend capital. Therefore, if expenditure of £1·5 million is made on the road race, that £1·5 million cannot be spent elsewhere. The amendment seeks to hold the council to its projections. If it believes in its figures, both of our proposals should be acceptable. The amendment would require the council to spend no more in initial capital than £1·7 million in 1986. Therefore, it cannot claim that inflation has speeded up—which it has—and that £1·5 million is no longer realistic.
I hope that both proposals will be acceptable to the promoter of the Bill. I make it clear that, unless undertakings are given. I intend to push both of them to a vote.

Sir Reginald Eyre: I am grateful to the hon. Member for Birmingham, Ladywood (Ms. Short) for the forthright way in which she moved the amendments. I appreciate the underlying principle that both she and the hon. Members for Birmingham, Hodge Hill (Mr. Davis) and for Birmingham, Perry Barr (Mr. Rooker) have advanced in asking for detailed study and consideration of the point encompassed in both amendments.
In principle, a requirement that the race would not continue—that is, that the powers to operate the race would cease—if the event could not be staged without incurring annual losses, is accepted. The city council would not want to continue running the race if it had to require support from the ratepayers each year.
However, the wording of the appropriate legislation needs to be carefully considered to achieve that objective. I can illustrate the drafting difficulty by pointing out that the words "profit income" do not represent a precise accounting phrase. The intention is to introduce an amendment in another place to deal fully with the principle of the new clause.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) asked whether we could make any necessary amendments in this House. I understand that it is not procedurally possible at this stage to do that. In any case, it is necessary to arrive at the precise form of words to meet the principle of the amendment. On that basis, I ask Opposition Members to accept my assurance that a suitable amendment will be introduced in another place.

Mr. Terry Davis: Clearly, the hon. Gentleman is making great efforts to meet the arguments that my hon. Friends and I have adduced. Why is it not procedurally possible to amend the Bill in this House?

Sir Reginald Eyre: I am not fully acquainted with all the mysteries of the procedural difficulties that apply in Parliament. I understand that if we were to seek to make the change now, a manuscript amendment would be necessary and that there would not be time to incorporate the points made by the hon. Member for Ladywood in a suitable form of words. I am giving an undertaking of equivalent value in that such an amendment will be introduced in another place. I give that undertaking on behalf of the city council.

Mr. Rooker: I am grateful to the hon. Gentleman for the undertaking that he has given. However, the promoters are, in charge of the Bill. It is their measure and they are paying for it. Indeed, they have probably paid the legal profession a fortune to get it this far. The promoters are therefore entitled to promote any amendment that they


wish and to do so at any stage of the Bill. I feel sure that if those with the expensive and expert advice necessary to frame such an amendment were to do that and present to the hon. Member for Birmingham, Hall Green (Sir R. Eyre) a manuscript amendment, and he sought approval to put it before the House, the matter could be settled here and now.

Sir Reginald Eyre: I appreciate the hon. Gentleman's impatience to settle the matter promptly. He will know that I am not in charge of the detailed professional handling of the Bill. I am faced with the technical fact that while I am able to accept the principle of the amendment, consideration must be given to it so that a suitable form of words, from the accounting and legal point of view, may be devised. I cannot introduce such an amendment at this stage. It is with complete honesty that I am trying to ensure that the amendment is achieved in a correct form. I ask the hon. Member for Ladywood and her hon. Friends to accept my assurance.

Ms. Clare Short: I accept the hon. Gentleman's assurances and I am grateful for them. It would be generous if he were to agree not to oppose the new clause and, if it needs correction, to correct it when it goes to another place.

Sir Reginald Eyre: I have had much experience of piloting legislation through the House. I have given an undertaking without reservation on behalf of Birmingham city council. I hope that the hon. Lady and her hon. Friends will be kind enough to accept it. I assure her that no damage will be done to her argument and that the result will be exactly the one that she wants to secure.
Amendment No. 16 raises more difficult issues. It is directed to the proposed limit on initial capital expenditure. The new clause seeks to introduce a requirement that the race should be conducted for a specified period—five years—without loss and amendment No. 16 seeks to provide a more limited time. Birmingham city council is not able to accept the amendment. The city is confident that the costs can be kept within a proper ceiling but there could be an unforeseen additional cost. For example, road surfaces could be displaced and urgent expenditure would be required to put the road in a satisfactory condition within the required time. Such an unforeseen additional cost would mean that the race could not proceed. The amendment includes a certain figure and the item of unforeseen expenditure could take the city only slightly over that limit. If the need for such expenditure were to arise at the last minute and to cause the capital limit to be breached, the race would have to be cancelled and the city could incur huge compensation payments that would be far in excess of the additional capital spending required.
After earnest discussion, and with a great desire to meet the arguments that are being raised by the hon. Member for Ladywood and her hon. Friends, Birmingham city council cannot commit itself to cancel the race if there were to be some slight extra expenditure beyond its control which would affect annual expenditure. The council has no reason to believe that costs will escalate and, indeed, it is sure that they can be contained.
The hon. Member for Ladywood has referred to annual accounts. As I said on Second Reading, the annual accounts must make clear exactly what the position is in respect of the race. The hon. Lady's argument will be met

by the provisions that turn on five-yearly expenditure and by annual accounting. For the reasons that I have offered, the council cannot accept a limitation on expenditure each year. However, it believes that it will be able to ensure that it keeps within its planned expenditure.

Mr. Terry Davis: The hon. Gentleman may be confusing new clause 1 and amendment No. 16. In his earlier response, he referred to the annual expenditure and the problems that might be created if there were a limit on the annual expenditure. At that point he was referring to amendment No. 16. The amendment is concerned only with capital expenditure, which is by definition once-for-all-expenditure. I think there was confusion there in the hon. Gentleman's mind.
My hon. Friend the Member for Birmingham, Ladywood (Ms. Short) would not wish to be so inflexible as not to provide for the possibility of some unforeseen capital item taking the cost above the limit which she has suggested, but the limit that my hon. Friend has suggested seems to be the council's own estimate of £1·5 million, adjusted for inflation. Is the hon. Gentleman saying that there is nothing in that estimate for contingencies?

Sir Reginald Eyre: I am grateful to the hon. Member for Hodge Hill, who has clarified a possible misunderstanding arising from what I said earlier. He is right in saying that amendment No. 16 relates to the initial capital expenditure, which, as we know, has been said to be £750,000 a year for two years, totalling £1·5 million.
I suppose that it would be difficult to ask any councillor or any public body to say that it had taken complete account of the possible inflationary consequences in any transaction over the period in question, but the council believes that it can ensure that the costs are contained. I think we would all want to say that some account must be taken of inflation. The latest estimates are that the rate of inflation will be falling again towards the end of this year. We all know the difficulties where inflation is governed by world trading and financial circumstances. Therefore, although I understand the hon. Gentleman's point, I do not think that the council can commit itself to meet his point completely.
I am trying to emphasise to the hon. Gentleman and to the hon. Lady that, with regard to the initial capital expenditure spread over two years, the council can ensure that it will be kept within the limit estimated. It accepts the point that the hon. Lady has emphasised about the importance of annual accounting, which we all accept. Furthermore, I am delighted to emphasise that the council is able to accept fully the principle set out in new clause 1. I am putting that total package to the hon. Lady, because the council has done as much as it can in capital terms to accept her amendment.

Dame Jill Knight: Will my hon. Friend agree that Birmingham city council has taken immense trouble over a long period? There were many doubters at the outset. Am I right in saying that the financial conclusions were not reached without the burning of much midnight oil?

Sir Reginald Eyre: My hon. Friend is right to make that point. The sceptical view taken by some people, in a quite healthy way, has caused much care to be taken in the preparation of the Bill, and the degree of care has increased as time has passed.

Mr. Ashby: Will my hon. Friend give way?

Sir Reginald Eyre: Perhaps my hon. Friend will excuse me for just a moment. I was describing the preparation to Opposition Members. My hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) is right—none of us believe that the city of Birmingham would be anything other than responsible when calculating such expenditure. The issues of sensitivity which the hon. Member for Hodge Hill mentioned are well understood because there is a desire to use the money in other ways which it is believed would be advantageous to the city.

Ms. Clare Short: I have listened carefully to everything that the hon. Gentleman has said. The trouble with acceptance of new clause 1 but rejection of amendment No. 16 is that it would be possible to spend massively over the capital projection, to find within five years that the whole thing is losing money and close it down. It is surprising that the city council is not prepared to accept the amendment, or something like it, if it has any confidence in its cost projections. A document prepared for the city council on the financial implications of a motor race in Birmingham told us that a contingency of 35 per cent. to allow for inflation and unforeseen difficulties had already been included in the capital figure. We are now told that the capital will be spent over two years, but that a limit of £1·7 million in one year is not acceptable. That seems quite extraordinary.

Sir Reginald Eyre: I am not saying that capital expenditure of £1·7 million is not acceptable. I am saying that the strict terms of amendment No. 16 would be difficult for any responsible body to accept. As I have explained, the job will be phased over two years, during which time there might be some unforeseen event. It might cost only £300,000, but if that sum took the total over the limit, the city council would be in far greater difficulties than any of us would like. That is the difficulty with specifying a figure. The reason is a business reason.
The council is being terribly responsible in responding to the amendment. It has given full reasons why it cannot accept the amendment in strict detail, but it has declared that it will do everything possible to ensure that planned expenditure is not exceeded and that the job is done in two years so that it can conduct the business effectively. In view of that attitude, acceptance of new clause 1 and acceptance of annual accounting, I hope that the hon. Lady will be able to accept this as a reasonable package.

Mr. Ashby: Has my hon. Friend considered what I said about payments of compensation and damages? Has he insisted that the Bill provide that such claims be settled in 12 months? How would they affect the profit income?

Sir Reginald Eyre: I believe that, in regard to compensation and the involvement of the Lands Tribunal, my hon. Friend does not accept a principle that has been established in much legislation in which power is given to a public authority to carry out major works.
The Lands Tribunal has always been accepted as the eventual appeal body for calculations of compensatory damages. The matter was carefully considered in Committee and an obligation was placed on the city council in regard to the acceptance of liability. The rights of anyone who may have a claim will be much improved; he will not have to go through the usual process of law, but it follows that a claim will have to be initiated within

a shorter period. I ask my hon. Friend to consider the balancing legal points. They secure the interests of individuals and put a severe responsibility on the city council.

Mr. Speaker: Order. Before we proceed too far down this line, may I draw the hon. Gentleman's attention to the fact that I think this matter would be more correctly discussed under amendment No. 12, which deals with compensation.

Mr. Rooker: I did not realise that the hon. Member for Birmingham, Hall Green (Sir R. Eyre) had finished. He has completely ignored amendment No. 7, which is obviously a non-runner. The thought of getting the necessary capital expenditure from a source other than the repair bills of my constituents obviously never crossed the minds of those who wrote the hon. Gentleman's brief.
Amendment No. 7 is an alternative to amendment No. 16, which is also unacceptable to the city council. The hon. Member for Hall Green made a telling observation when he said that the city council was beginning to think about the problems as time runs out. Even at this late stage, I cannot see why the council cannot seek some external financing sponsorship for the capital expenditure involved. A total of £1·5 million at 1984 prices—most of the calculations were put together in 1984 — is chickenfeed to big business.
On Second Reading, the hon. Member for Hall Green told us about the influential organisations that supported the Bill. He read out a list of home-grown and foreign-based multinationals in the motor industry in and around Birmingham. The list included Austin Rover—I would not include that company as a top profit-maker; Shell UK Oil—as far as I am aware, that company is making no losses; Cadbury Schweppes, a home-grown multinational, based, for all practical purposes, in Birmingham; IMI, a massive multinational which, to its credit, retains its headquarters in the inner city of Birmingham and puts its money into industrial units; GKN, one of the most profitable companies in the land, with its headquarters and many plants in the west midlands; and Davenports, the local brewers — I do not know much about their financial position, but I do not think that they are making a loss. The Holiday Inn kept writing to hon. Members asking them to support the Bill. It will make money for the hotel and create an occasional job for an apprentice.
Why cannot those big companies put their hands in their pockets? I suggest that £200,000 apiece would do the trick. They could lose such a sum in adding up the third column of figures beyond the decimal point. It would be that small. The scaffolding, crash barriers, new lamp standards and seating could be adorned with their names, and rightly so. What is wrong with that? At this late stage, why cannot the city council try to obtain the initial capital expenditure from elsewhere? The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) wants the ratepayers to put their hands in their pockets to provide the spin-off for all the companies to which I have just referred. I believe, however, that they ought to make a contribution to the city, and it is not too late for them to do so.
9.30 pm
We accept the sincerity of the hon. Member for Hall Green. Nobody disputes his integrity. However, we cannot control what happens in the other place. The hon. Gentleman said that he has experience of legislating. I


acknowledge that he has been a Member of Parliament longer than I, and he has also served as a Minister. However, I have been a Member of Parliament sufficiently long to know that not every statement made in this House is translated into legislation in the way that was originally envisaged.
I should prefer new clause 1 and amendments Nos. 16 or 7, which are alternative amendments, to be included in the Bill without a Division. If the figures are wrong, I should be prepared to allow indexation in the case of amendment No. 16. We are endeavouring to insert the intention behind the background briefings that were provided by the city council. We do not want runaway spending—

Ms. Clare Short: Another Concorde.

Mr. Rooker: That is right; we do not want another Concorde.
The city council says that the project will cost only £1·5 million in 1984 prices, or £1·7 million in 1986. The council has built into its calculations massive variations of the money that it will get from television rights. They amount to as much as 35 per cent. The financial department of the city council runs a fairly tight budget and ship under Councillor Dick Knowles, so I am confident that if it says that the price will be £1·5 million in 1984 prices, it can be accepted. I shall keep the council to it.
Financial discipline must be imposed not upon the city council but upon the people with whom it does business. Contract after contract will be let to the private sector. I want extra jobs to be created, but the private sector must be told that this is not a gravy train. It must not be led to believe that no financial ceilings will be imposed, just because this new tourist venture has been sanctioned by Parliament, and that it must be got on the road at all costs because the council does not want to lose face and therefore an extra 5 per cent. on this or an extra 10 per cent. on that, or an overrun on something else, will be met by the city council. If the private sector realises that a financial ceiling is set upon the city council's expenditure, it will be forced to keep within financial limits.

Ms. Clare Short: The feasibility study which has been circulated to hon. Members by the RAC demonstrates that considerable road works will take place. There will be road widening and the removal of roundabouts. The RAC also says that further discussions will take place and that further requiremens may be imposed. Does my hon. Friend agree that it might help if the city council said that there was a limit upon the amount of capital that it could spend and that the road race project could go ahead only within those financial limits?

Mr. Rooker: Yes, that is right. If there were problems of unforeseen expenditure and of expenditure going out of control, the city council could say that Parliament had limited the expenditure. It would be open to the city council to obtain money from elsewhere if there were an overrun for some reason. Big, profitable businesses based in Birmingham, living off the motor industry and its component suppliers, such as hotels, would put their hands into their pockets if they believed the venture to be viable. It is in the interests of the city council and of its contractors to see that there is no bottomless pit and that a limit is built into the capital expenditure allocation.
Is there any limit that the city council will accept? Will it accept a limit of £2 million, for example? That figure

is way above its original estimate. Does the council say that to have any limit in the Bill would be unacceptable, for the reasons that the hon. Member for Hall Green gave? If the council is not prepared to accept a limit, that throws into doubt all the calculations that have been made.
I do not know whether that matter was covered in the opinion polls and the report sprung on us at the last moment by my hon. Friend the Member for West Bromwich, East (Mr. Snape). None of us had seen a copy of the report. He seems to be the only person to have a copy. I do not know whether money was mentioned in the opinion poll or whether questions about capital expenditure were included. I do not know whether my hon. Friend asked for the report or whether it was offered to him. I should like to know whether the financial side of the race is dealt with in the report.

Mr. Terry Davis: Does my hon. Friend agree that the cost of the report, which has been quoted by my hon. Friend the Member for West Bromwich, East (Mr. Snipe), should be included in the costs of the motor race?

Mr. Rooker: Opinion poll companies do not work for nothing. Even those that work for the Labour party do not work for nothing. Someone has to pay for their work. The city council must be paying the bill.
We are talking about £1·5 million of capital expenditure. Like my hon. Friend, I question the city council's priorities. I do not believe that the race is a suitable priority. I intervened during the speech of my hon. Friend the Member for West Bromwich, East only to make the narrow point of whether we need the Bill. The need for a Bill gives us an opportunity to question the city council's priorities. Normally I should not consider doing that. I disagree a great deal with the city council's priorities, whichever party is in control. It is not within my competence, however, to tell the city council that its priorities are wrong and that it should do what I say. In this case, however, it requires the approval of the House of Commons. I am prepared to say that the city council's priorities are wrong. I have the opportunity to do that, and, what is more, I have the opportunity to influence its priorities. It is an opportunity that I do not normally have.
Birmingham does not spend all its capital receipts from housing on housing. This is a highly technical subject, and I do not claim to understand the ins and outs of it all. We could spend all those capital receipts on housing. There is nothing in the legislation to stop us from doing that. Indeed, we should be doing that. That was one of the manifesto commitments upon which the Labour party won the last city council election. We are not doing that. Therefore, I question the expenditure of £1·5 million that could be spent on maintenance and remedying defects in some of the worst housing conditions in Birmingham.
A distinction is drawn along party lines. It is not too late to ask the private sector to put its hands in its pockets. It does so for the greater good of Birmingham and for the benefit of its companies, and I believe that the House should ask it to do so this time. The city council should not be given carte blanche—in effect, an open cheque—by a refusal to accept amendment No. 16. I would not argue with the idea that the other place can include an indexation provision in the Bill, but I should like this House to insert such a proposal.
I accept what the hon. Member for Hall Green said about new clause 1. I accept his integrity. There is no


reason why we cannot include new clause 1 and let the other place mess about with the wording and change it. We all agree. The promoters say, "We accept the thrust of the new clause." What is there between us? If things go wrong in the other place, there will not be the opportunity that the House needs to put this right. I am not prepared to leave this provision to the other place. Some Members of the other place are root and branch opposed to the Bill, whatever concessions are given. Others favour the legislation. Who is to say how the votes will be carried?
If we agree on the thrust of the new clause, we should include it in the Bill and make progress with the other amendments. I hope that this will be done with the same friendliness as has been shown so far in the debate.

Mr. Corbett: Presumably, my hon. Friend received a letter from the leader of the city council, Councillor Dick Knowles, in which he gave an undertaking that
the race shall not take place if an operating loss is still made in the fifth year of the event.
That gives added importance to the question that my hon. Friend has just posed to the hon. Member for Birmingham, Hall Green (Sir R. Eyre): what are we arguing about?

Mr. Rooker: We are arguing about very little. We are arguing about whether to include the provision now or to do so later. I believe that it should be included now. The city council has woken up to some of the points that my colleagues have been making for months. The council has left it until the last minute to seek a meeting of minds. If Conservative Members had taken the same view, either before or just after Second Reading, instead of giving a blank cheque with respect to financial provisions, we would probably not be in this position now. Members of Parliament representing Birmingham and elsewhere agree that there is nothing between us on the point of principle. Therefore, there is nothing to stop us doing the deed and having the technicalities corrected in the other place. After all, the House of Commons is really the upper House, whatever the terminology used by the press to describe the two Houses.

Mr. Terry Davis: I support the new clause and the amendments.
As my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) has explained, there is little difference between us on the new clause. According to its wording, it will be incumbent upon the city council to stop holding a motor race if it is not making a profit after five years. The hon. Member for Birmingham, Hall Green (Sir R. Eyre) says that he accepts the spirit of the new clause. He knows that the city council is anxious to accept it. As my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) has mentioned, we have received a letter to that effect from Councillor Dick Knowles. There is no disagreement on that point.
There is also no disagreement on the need for separate accounts. Separate accounts are essential if we are to know whether the race is making a profit during those five years. A few months ago, the chairman of the general purposes committee gave us an assurance that accounts would be kept. I am not clear whether accounts have already been kept and whether we can see 1984–85 accounts on the expenditure that has already been incurred, for example, on entertainment of Members of Parliament. I hope that

cost is included in the accounts as well as a contribution towards the cost of the survey conducted by some organisation of behalf of the city council. Apparently, the survey's findings have been communicated only to my hon. Friend the Member for West Bromwich, East (Mr. Snape).

Mr. Snape: Will my hon. Friend give way?

Mr. Davis: No.

Mr. Snape: rose—

Mr. Davis: All right, I shall give way to my hon. Friend because he seems so upset. Obviously he has more information than hon. Members representing Birmingham.

Mr. Snape: I should like to make two points. First, I have no idea what has been spent on entertaining hon. Members on either side of the House with regard to the Bill. I hope that my hon. Friend will accept that not a penny has been spent on entertaining me, and that that is not the reason behind the attitude that I have taken. Secondly, I have only just noticed that, although the survey was conducted in May, the date on the document is June. I can assume only that it has been published today or recently.

Mr. Davis: I accept my hon. Friend's assurances. I had already guessed that he went to the council house for a briefing this morning, and obtained the document during that meeting.

Mr. Snape: I have to ask my hon. Friend to accept that I did not go to the council house for a briefing this morning. I met somebody from Birmingham city council after a meeting of the west midlands Trades Union Congress that I had attended. It was only because I happened to be in Birmingham this morning that the document became available to me.

Mr. Davis: I knew that my hon. Friend was in Birmingham this morning because he told us how he drove through the constituency of Ladywood. But let that point rest. The important matter is the new clause.
I also leave on one side the need for annual accounts, which is a serious point because the expenditure that has already been incurred should be accounted and set against the income from the motor race.
I agree strongly with the argument advanced by my hon. Friend the Member for Perry Barr. The hon. Member for Hall Green has assured us that the city council will seek to amend the Bill in the other place. But it is not within the power of the city council to amend the Bill. That responsibility rests with the other place. Therefore, it is important for the hon. Gentleman to accept the new clause. If he does not, it will be possible for the new clause drafted by the promoter of the Bill to be rejected by the other place. If it is rejected, the issue will not come back to the House of Commons. The only way in which the House of Commons can be sure of our joint wishes being put into effect is by accepting the new clause, so that, if a different view prevails in the other place, the matter must come back to the House of Commons because the Bill will have been amended since it left the House of Commons.
In no way am I casting aspersions on the integrity of the hon. Member for Hall Green or his assurances. Nevertheless, I cannot understand why the hon.


Gentleman cannot accept the new clause. Then it can be amended in another place to give effect to the accounting expression that he described as being slightly different from the wording that has been used by my hon. Friend. If we accepted the new clause, we could make the progress that hon. Members on both sides would like.
Amendment No. 16 would restrict the city council to a capital expenditure of £1·7 million in 1986.
I should like to deal first with a detailed point because the hon. Member for Hall Green said that the city council told us that it wishes to incur its expenditure over a period of two financial years. That point was not relevant because the expenditure would be in the calendar year 1986 to which the amendment refers. I recognise that the expenditure would fall into the financial years 1985–86 and 1986–87, but it would almost certainly be in the calendar year of 1986. We shall not quibble if some items of capital expenditure are incurred before the end of the calendar year.
An important principle has been advanced by my hon. Friends concerning the confidence that we can have in the figures that have been advanced. I must correct my hon. Friend the Member for Perry Barr, who referred to the estimate of £1·5 million as being at 1984 prices. In fact, that estimate is not given at 1984 prices. It is clear from the information that we have been given that the city council estimated the capital expenditure at August 1984 prices and added 35 per cent. to cover the contingencies and inflation between 1984 and 1986. Therefore, one quarter of the capital estimate of £1·5 million is to cover contingencies and inflation. My hon. Friend the Member for Ladywood is generously adding a further £200,000 to that estimate.
I wonder how much leeway the city council requires. I accept the point of my hon. Friend the Member for Perry Barr, when he asked whether the council would accept a limit of £2 million. What figures does the council have confidence in? There must be a figure which the city council is not prepared to pay for a motor race. I am prepared to accept whatever figure it gives, unless it says £20 million, which is not realistic. It may set the figure at £2 million, £1·7 million or £2·5 million, but there should be a limit.
Alternatively, the city council could accept amendment No. 7 because it goes to the heart of our objections, which relate to the use of the capital allocation by the city council for a motor race. Personally, I would not press amendment No. 7 because the city council has moved a long way towards meeting us. Indeed, it has moved much further towards our position compared with its previous position. It has virtually accepted 90 per cent. of our argument about the need to ensure that £1·5 million will remain available for all the priorities which I share with my hon. Friends the Members for Ladywood and for Perry Barr. Therefore, I urge my hon. Friend the Member for Perry Barr to withdraw amendment No. 7. Although I agree with his original intention to tell the city council to look for external money for capital expenditure, the objective was to meet our objection to the Bill. It was a good idea, but now the city council has gone past that point in its offer to us this afternoon.
On amendment No. 16, I cannot understand why the city council will not accept a limit. I recognise the force of the argument of the hon. Member for Hall Green about unforeseen contingencies and that in the normal course of events it would be unwise to limit the city council in this

way. Nevertheless, it shows a remarkable lack of confidence in the council's figures that the council can conceive that the expenditure will be so much more than the estimate. The council must have estimated that the cost would be about £1·2 million. It increased the figure to £1·5 million, and we are adding £200,000. In other words, we are providing a 50 per cent. contingency and inflation fund. How much more inaccurate can the estimates be? If they are more inaccurate than that, I do not think much of the figures, and I would be surprised if the city treasurer thought that he had produced such loose estimates.
I ask the hon. Member for Hall Green, who has been most accommodating in his approach to our amendments, to reconsider the possibility of accepting them.

Sir Reginald Eyre: I wish to reply to the points raised by Opposition Members. I begin by apologising to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for not having referred to amendment No. 7. I did not hear it called and did not think that it was grouped with the amendments; otherwise I would certainly have spoken to it.
The hon. Member for Birmingham, Hodge Hill (Mr. Davis) showed a degree of reservation about the amendment. It would require the city to raise the initial capital cost externally from sponsorship. It is extremely difficult for the city to accept the amendment because it would prove difficult to raise such funding in advance of the facilities being available to run the race. Sponsorship is much more likely to be related to special events at specific times when such matters as television coverage, timing and races are arranged. A large part of the initial capital cost would not relate to expenditure with which sponsors could identify easily. Sponsorship and advertising income would help to ensure that the race is run at a profit each year, after allowing for the financing of the initial capital cost.
The aims are agreed in the city council's proposal. The initial cost will effectively be funded over a period from race proceeds. I assure the hon. Gentleman that the principle of his amendment is fully accepted. The intention is to recoup the cost of setting up the event from the income that it generates. I ask the hon. Gentleman to accept that it is simply a matter of timing. He is keen to take this money from a sponsor or industry, and I believe that it will be possible to recoup the cost, but it is a matter of timing. The city council believes that it cannot raise that funding in advance of the scheme proceeding and sponsorship beginning to operate.
I should tell the hon. Member for Hodge Hill that amendment No. 4, which is to correct a drafting error, is accepted. The hon. Gentleman says that we must accept amendment No. 16 although we know that it is inaccurate.

Mr. Terry Davis: I am urging the hon. Gentleman to accept a new clause 1 despite the fact that it is inaccurate.

Sir Reginald Eyre: The hon. Gentleman is saying that we should accept new clause 1 and amend it in another place. I am sorry, but I believe that that procedure would be without precedent. It would reflect badly on the House, especially when one considers that there is a difficulty in using the terms of the definition. However, I have given an undertaking on behalf of the city council. I believe that we have settled the matter. I ask him and the hon. Member for Ladywood to accept my undertaking that the matter will be dealt with properly in another place.

Ms. Clare Short: I believe that we should vote on new clause 1 and on amendment No. 16. I accept the hon. Gentleman's integrity and commitment, but undertakings have been given in the House before by Governments, not by Back-Bench Members, which have not been fulfilled. That is why I wish the House to vote on the new clause and the amendment, but I make it clear that I accept the hon. Gentleman's integrity and commitment to accepting the amendments.

Sir Reginald Eyre: I understand the hon. Lady's point, although I am sorry that she wishes to press the matter to a vote.
There is not much more for me to say, except to explain my reasons for rejecting amendment No. 16. The hon. Member for Perry Barr (Mr. Rooker) wants the amendment to be accepted. The difficulty in answering his point, at my present stage of instructions and present responsibility, is the unforeseen incident which might push up the figure. Opposition Members have won substantial concessions, including yearly accountability, a two-year limitation agreed, although not inserted in detail, and five-yearly full accountability. I have done my best to construe those matters in terms that are acceptable to the Opposition, and in view of what the hon. Lady said, I can go no further.

Question put, That the clause be read a Second time:—

The House divided: Ayes 20, Noes 127.

Division No. 245]
[9.59 pm


AYES


Boyes, Roland
Pavitt, Laurie


Callaghan, Jim (Heyw'd &amp; M)
Pike, Peter


Clwyd, Mrs Ann
Powell, Raymond (Ogmore)


Cocks, Rt Hon M. (Bristol S.)
Rooker, J. W.


Cook, Robin F. (Livingston)
Skinner, Dennis


Davis, Terry (B'ham, H'ge H'l)
Smith, C. (Isl'ton S &amp; F'bury)


Eastham, Ken
Thompson, J. (Wansbeck)


Evans, John (St. Helens N)
Weetch, Ken


Fatchett, Derek



Holland, Stuart (Vauxhall)
Tellers for the Ayes:


Lloyd, Tony (Stretford)
Ms. Clare Short and


McDonald, Dr Oonagh
Mr. Robin Corbett.


NOES


Alexander, Richard
Bottomley, Peter


Aspinwall, Jack
Bottomley, Mrs Virginia


Atkins, Robert (South Ribble)
Brandon-Bravo, Martin


Baker, Nicholas (N Dorset)
Brinton, Tim


Batiste, Spencer
Brooke, Hon Peter


Beaumont-Dark, Anthony
Bruce, Malcolm


Beith, A. J.
Bruinvels, Peter


Best, Keith
Buck, Sir Antony


Blackburn, John
Budgen, Nick


Boscawen, Hon Robert
Burt, Alistair





Butcher, John
Maude, Hon Francis


Butler, Hon Adam
Maxwell-Hyslop, Robin


Butterfill, John
Mitchell, David (NW Hants)


Carlisle, Rt Hon M. (W'ton S)
Monro, Sir Hector


Cash, William
Montgomery, Sir Fergus


Chalker, Mrs Lynda
Neale, Gerrard


Chapman, Sydney
Neubert, Michael


Coombs, Simon
Pollock, Alexander


Cope, John
Powley, John


Currie, Mrs Edwina
Proctor, K. Harvey


Dorrell, Stephen
Roberts, Wyn (Conwy)


Douglas-Hamilton, Lord J.
Robinson, Mark (N'port W)


Durant, Tony
Roe, Mrs Marion


Fenner, Mrs Peggy
Rowe, Andrew


Fookes, Miss Janet
Sainsbury, Hon Timothy


Forman, Nigel
St. John-Stevas, Rt Hon N.


Forth, Eric
Sayeed, Jonathan


Fox, Marcus
Shaw, Giles (Pudsey)


Franks, Cecil
Shepherd, Colin (Hereford)


Freeman, Roger
Sims, Roger


Gale, Roger
Skeet, T. H. H.


Garel-Jones, Tristan
Smith, Tim (Beaconsfield)


Golding, John
Snape, Peter


Gorst, John
Soames, Hon Nicholas


Gower, Sir Raymond
Speller, Tony


Greenway, Harry
Steen, Anthony


Gregory, Conal
Stern, Michael


Ground, Patrick
Stevens, Lewis (Nuneaton)


Hamilton, Hon A. (Epsom)
Stevens, Martin (Fulham)


Hargreaves, Kenneth
Stewart, Allan (Eastwood)


Harris, David
Stradling Thomas, J.


Haselhurst, Alan
Taylor, Rt Hon John David


Hawkins, Sir Paul (SW N'folk)
Taylor, John (Solihull)


Heathcoat-Amory, David
Temple-Morris, Peter


Heddle, John
Terlezki, Stefan


Henderson, Barry
Thomas, Rt Hon Peter


Hicks, Robert
Thompson, Donald (Calder V)


Howarth, Gerald (Cannock)
Thornton, Malcolm


Jackson, Robert
Thurnham, Peter


Johnston, Sir Russell
Waddington, David


Jopling, Rt Hon Michael
Wakeham, Rt Hon John


Key, Robert
Walker, Bill (T'side N)


Knight, Dame Jill (Edgbaston)
Wall, Sir Patrick


Knox, David
Wallace, James


Lang, Ian
Wardle, C. (Bexhill)


Lawrence, Ivan
Watts, John


Lee, John (Pendle)
Wells, Bowen (Hertford)


Lightbown, David
Wiggin, Jerry


Lloyd, Ian (Havant)
Winterton, Mrs Ann


Lloyd, Peter, (Fareham)
Winterton, Nicholas


McCurley, Mrs Anna
Wood, Timothy


MacKay, John (Argyll &amp; Bute)



Maclean, David John
Tellers for the Noes:


Madel, David
Sir Reginald Eyre and


Major, John
Mr. Gregory Knight.


Mather, Carol

Question accordingly negatived

It being after Ten o'clock, further consideration of the Bill stood adjourned.

To be further considered on Thursday.

European Communities (Definition of Treaties)

[Relevant documents: European Community Documents Nos 9910/82, Commission memorandum on the Community's development policy; 4126/83 on operations of STABEX in 1981; 10505/83 on mining in the ACP States; 7382/84 on the community and Africa; 10677/84 on operations of STABEX in 1982 and 1983; 6380/85 Draft Decision on the conclusion of the third ACP-EEC Convention of Lomé; and the unnumbered Report of the Court of Auditors on aid to third countries.]

The Minister for Overseas Development (Mr. Timothy Raison): I beg to move
That the draft European Communities (Definition of Treaties) (Third ACP-EEC Convention of Lomé) Order 1985, which was laid before this House on 23rd May, be approved.
As hon. Members will be aware, the Lomé convention is the treaty which governs economic relations between the European Community and the African, Caribbean and Pacific group of developing countries. The third ACPEEC convention, or Lomé III as it is commonly known, was signed on 8 December last year and covers the period 1985 to 1990.
The draft Order in Council, to which the motion refers, allows effect to be given to the provisions of the convention in United Kingdom law. This in turn opens the way for ratification of the convention by the United Kingdom. The convention will come into force when it has been ratified by all the member states, the European Community and two thirds of the ACP states. This will probably be early next year.
I am grateful to the Select Committee on European Legislation for agreeing that the debate on the draft order also provides an opportunity to consider other Community documents which it has recommended for debate. I shall not take up the time of the House discussing each of those documents in detail, though I shall deal with points that hon. Members raise when I reply to the debate. However, there are a few general aspects of the documents to which I should draw attention.
By and large, they have been overtaken by, or been subsumed in, the new Lomé convention. This is particularly the case with the Commission memorandum on the Community's development policy, which came to be known as the "Pisani memorandum."

Mr. Peter Pike: On a point of order, Mr. Deputy Speaker. Because of the discussion that is taking place among hon. Members assembled just beyond the Bar of the House, I am having difficulty in hearing what the Minister is saying.

Mr. Deputy Speaker (Mr. Ernest Armstrong): I, too, am having some difficulty in hearing the Minister. If hon. Members who are standing beyond the Bar will leave or come into the Chamber, we will get on with the debate.

Mr. Raison: Perhaps they would care to join the debate.
What came to be known as the "Pisani memorandum" was thoroughly discussed by Development and Foreign Ministers in 1982 in preparation for renegotiating the Lomé convention. Some of its main ideas, such as that the Community should promote food security in developing

countries and hold a policy dialogue with aid recipients, were pursued in the Community's mandate for the Lomé negotiations. Others, such as improved co-ordination, were the subject of separate Commission proposals.
Similarly, the 1983 review of EEC-ACP relations in the mining sector concluded that, in negotiating the third Lomé convention, the Community should seek to help the ACP to develop its mineral resources and thus also ensure security of supply for Europe.
The Commission's paper on the European Community and Africa did not require Council decisions but provided a timely analysis of recent African experience and the barriers to growth there. The problems of Africa have remained very much to the fore in Community discussions, and the Development Council, on 23 May, reviewed the Community's response to the present crisis.
It is perhaps appropriate for me to clarify the role of the Lomé convention in meeting both the immediate and longer term needs of Africa. For the most part, the Community's role in providing food and emergency relief is financed from the Community budget and does not, therefore, come under the Lomé arrangements. However, one ingredient in the Dublin summit's commitment to provide at least 1·2 million tonnes of cereals was the allocation of £45 million from the emergency provisions of the second Lomé convention. This is now being implemented.
The main contribution of the convention is long-term development. Ninety four per cent. of commitments from the fifth European development fund, under Lomé II, have been made to Africa. These include projects like that at Jebel Marra in the Darfur province of Sudan, which I visited in February. As Commissioner Natali reminded the ACP-EC Council of Ministers in Luxembourg last Friday, the new convention will give added emphasis and finance to such schemes.
The Court of Auditors report on the co-ordination of Community aid to third countries is a useful reminder of the benefits which increased co-ordination of aid can bring. I share the Commission's hope that the policy dialogue provided for in Lomé III will improve aid co-ordination.
The Development Council has devoted continued attention to co-ordination, adopting at its meeting on 23 May a 'format for joint aid reports by the missions of Community member states and the Commission in developing countries.
Finally, I should mention specifically the decision enabling the Council and the Commission to conclude the third Lomé convention on behalf of the EEC itself and of the European Coal and Steel Community. This must be approved by the Council before the convention can enter into force. The Government have no difficulty with the proposal, which is a matter of common sense. As I have said, I should be happy to deal more fully with these documents in winding up if hon. Members wish.
Ten years since the first Lomé convention was signed, this is a good time to take stock. Ten years ago the convention was seen by many as a new way of organising and managing relations between rich and poor countries. What has been the record? We have to recognise that development in many ACP countries has slowed or gone into reverse. The proportion of the Community's trade going to the ACP compared with the rest of the world has diminished. The share of ACP exports taken by the


Community market has also dropped. We have ourselves expressed concern about the quality of aid from the European development fund.
Against this, it is clear that the convention constitutes a form of co-operation that is valued on both sides. It cannot guarantee that world trade will grow. But it does offer the ACP states free access to the Community market for 95 per cent. of their exports to the Community, and they receive assurances of substantial long-term aid commitments. For the member states, Lomé provides a European dimension to our overseas aid programmes. Moreover, 35 of the 66 ACP states are members of the Commonwealth, which thus gain privileged access to European markets and European aid through the convention.
Against this background one of our main goals in negotiating the new convention was to get a more effective instrument of development, and I think that this is reflected in the third convention.
The main objectives are clearly set out in a new introductory section: there are tighter procedures for planning EDF aid; stronger provisions for appraising and evaluating projects; a new provision to allow for fast disbursement of aid to maintain existing investments; a new chapter on drought and desertification; more stress on promoting investments; and throughout there is a strong and welcome emphasis on food production and agricultural development. That reflects the priority I gave in the negotiations to food security, and the final text incorporates most of the substance of what I proposed.
Underlying those improvements is the basic thrust of the arguments in Mr. Pisani's memorandum: that the Lomé partners share a common interest in following policies which lead to much better rates of economic growth and more balanced forms of growth than we have seen in the past. There is no sense in pouring large sums of money into projects which are plainly unsuited to the economic, geographic or climatic conditions of the country concerned—"building cathedrals in the desert," as Commissioner Pisani once put it. Nor is it productive to provide aid in sectors where mistaken policies are being pursued or where overall economic policies counteract the potential benefits of an aid project.
This is a sensitive area. The ACP states rejected the Community's initial proposals for a "policy dialogue", fearing that they would result in what they felt to be unwarranted interference in their internal policies. I cannot pretend that the wording eventually agreed is ideal. Whether or not it enables the Community to concentrate its aid on those countries and on those sectors in which viable economic policies are being pursued still remains to be seen. We have made clear to the new Commissioner, Mr. Natali, our strong commitment to the principles on which the Community negotiated, and he has assured me of his own commitment to them. The first missions to programme EDF funds will leave Brussels in July, and we shall support and encourage them to the best of our ability.
But the task of making the convention a more effective instrument for promoting the development of the ACP states cannot rest with the EEC alone. Many of the ACP states themselves now realise that their inability to feed their own populations and their consequent dependence on imported food is a major handicap in their struggle to improve living standards. That handicap can be overcome

only by developing coherent long-term policies and strategies, and that must be the responsibility of the Governments concerned,. The Lomé relationship, as has been frequently stressed, is one of partnership—a team effort in which all participants share responsibility.
The emphasis in Lomé III on the greater effectiveness of Community aid has resulted in a move towards Community support for key sectors or policy programmes rather than individual projects. Food strategies are one example—we have them for Mali, Zambia, Kenya and Rwanda. The fight against drought and desertification is another. Both areas are given prominence in the convention with a complete new chapter being devoted to long-term efforts to combat drought and desertification.
As a corollary to the shift of focus from individual projects to policy programmes, the convention also stresses the importance of regional co-operation and programmes intended to help more than one ACP state. The Community—itself a group of sovereign states—may often be better placed to provide assistance for such schemes than individual member states acting alone.
The total financial allocation for the sixth European development fund has been established at 7·5 billion ecu, or £4,438 million. The size of EDF VI was, not surprisingly, a central feature of the negotiations for the ACP states, and they felt bound to express their disappointment at the outcome. I think, however, that they will soon come to realise that the offer is remarkably generous. EDF VI will be 60 per cent. larger than EDF V. That represents more than maintenance of value in real terms at a time when most other multilateral aid organisations have been obliged to restrain or cut back their budgets. In addition, up to 1·1 billion ecu—£651 million—will be made available to the ACP states in the form of loans from the European Investment Bank's own resources.
As hon. Members are aware, the Government are firmly of the view that no amount of development aid can substitute for improving trade links between the developed and the developing world. The long-term economic security of the ACP states depends on their ability to increase trade flows by finding new markets for their goods. The ACP states themselves realise this. The income earned by the ACP states from trade with the Community is two to three times greater than the financial flows resulting from aid from all sources, and more than 30 times great as EDF aid alone. We therefore argued throughout the negotiations for further improvements in access to Community markets for ACP goods and for the removal of all remaining duties on agricultural products.
Most member states were prepared to see a relaxation of controls on some products, though not in cases where member states' agricultural produce competed most directly with that of the ACP countries. We were able to achieve agreement that in future ACP requests for improved access for particular products will receive a more rapid response. In considering those requests the Community will take account of concessions granted to other developing countries. We shall work hard to make a reality of that undertaking. It would have been better for the ACP had we been able to do more. Nevertheless, the existing Lomé trade arrangements are probably the most liberal on offer to any group of developing countries.
One significant improvement which we were able to obtain was relaxation and simplification of the convention's rules of origin.
I should also mention that the special trade arrangements for sugar, bananas, beef and rum—which are of particular importance for Commonwealth ACP states—have all been consolidated or improved in the new convention. On sugar, bananas, beef and rum, we had to fight hard to maintain the preferential access for our Commonwealth partners to the Community market which was provided under Lomé II. We were successful. Indeed, on rum we managed to obtain a substantial increase in the growth rate of duty-free quotas for the rest of the Community and a minimum Community import level of 170,000 hectolitres at the expense of a slight decrease in the growth rate of the quota for the United Kingdom market.
In addition to trade and aid, private investment has an essential role to play in developing ACP economies. I was delighted to find greater awareness than ever before amongst the ACP states of the need to create and maintain a stable investment climate. This attitude is reflected in the provisions of the investment chapter of the convention which is much more substantial than its predecessor.
Lomé III, like its predecessors, offers British business an opportunity to participate in the development partnership. Over the past few years, British business has won a growing share of EDF contracts. For the first time, in the first quarter of this year the percentage of EDF V contracts placed in Europe which were won by British businesses rose above 20 per cent. That is a good achievement. It recognises the quality and expertise which this country has to offer, but we can do better still. As they become better acquainted with administrative procedures in Brussels and in the ACP states, British firms will be better placed than ever to improve their performance under EDF VI. Firms which have not yet tendered for EDF contracts should not be deterred by unfamiliar procedures and requests. Their perseverance will, I am sure, be well rewarded.
Before concluding, I should like to take this opportunity to extend a welcome to the new members of the Lomé partnership. Angola and Mozambique played a full part in the negotiations and both countries have now signed the new convention. An additional protocol to the convention will drafted to provide for the accession of Spain and Portugal, both of which have agreed during the enlargement negotiations to shoulder their share of the financial burden.
I should like to end on what I am sure will be a point of particular pleasure for the House, especially the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston). One of the innovations contained in the new convention is the amalgamation of the ACP-EEC consultative assembly and its joint committee into a new joint assembly, composed of Members of the European Parliament and Members of Parliament or designated representatives of the ACP states. I am delighted to inform the House that the United Kingdom Members of the European Parliament have persuaded the joint assembly to hold its first meeting in Inverness this summer. It will be the first time that a meeting of this type has been held in the United Kingdom, and we very much look forward to welcoming delegates to this country.

Mr. Stuart Holland: It is widely recognised that the first Lomé agreement was a successor to the Yaoundé agreements, which were dominated by the

need to accommodate the interests of former French and Belgian colonial territories in Africa. The agreement was widely criticised at the time, but Lomé I was seen as a major and path-breaking step forward. It is of some relevance to the criticisms that we shall make of the Government's attitude to Lomé III to observe the conditions under which Lomé I was achieved.
There was considerable confidence among commodity producers following the success of OPEC in raising oil prices, and there was some disarray among some Community countries at the time, which were not sure to what extent other commodity producers might manage to gain similar advantages. There also was political support for Lomé I and the interests of Third world countries, such as that shown by my right hon. Friend the Member for Clydesdale (Dame J. Hart)—then Minister for Overseas Development—who very much regrets that she cannot be with us tonight, Claude Cheysson of the EEC commission and Jan Pronk, the Minister for Development in the Netherlands. In other words, there was a pull from the ACP countries and a push from Europe.
However, those high hopes were not fulfilled. They did not work out, for various reasons. There was not enough money and the Stabex commodity scheme was too small and had too limited a range of products. By the time of Lomé II, optimism had faded. In the event, Lomé, II closely resembled Lomé I in form, but not in substance. The only substantial innovation was the introduction of the Sysmin scheme for financing the rehabilitation of ACP mining industries. There was no specific fund for industrial development and in real per capita terms, the decline in European investment bank and European development fund money was about 20 per cent.
The Minister stressed that as we approach Lomé III, the economies of several of the countries concerned are in a precarious state. It also is worth stressing that the group contains more than two thirds of the world's least developed countries. Key social indicators such as literacy, school enrolment, life expectancy and child death rates are among the worst in the world.
The size of the Lomé countries is not so great in the global economy. They represent about 12 per cent. of the Third world's population. India alone has about twice the population of the ACP countries. However, the deprivation, poverty and backwardness of those countries and their lack of productive structure is recognised on both sides of the House as a severe handicap. Therefore, it is critical that in facing the challenge of the global crisis, the challenge of trade and the challenge of a renewal of the Lomé agreement, there should have been more than an adequate response from the EEC to the needs and demands of the ACP countries.
As the Minister said, the EEC response has been 7·5 billion ecus, with about 1·1 billion from the EIB. But the total of 8·6 billion ecus will only just preserve the Lomé II levels, taking inflation into account. It will not preserve those levels if population increase is recognised. It would need 10 billion ecus to get back to the levels of Lomé I. That is against a background in which the ACP countries, as illustrated by the Lords Select Committee report and other sources, have been asking for 11 billion ecus. Therefore, there have been cuts.
Have the Government been pushing for the higher sums or arguing for the lower sums, as they recently pressed for a £22 million cut in the EEC food aid budget for next year? What has been the Government's role during the


negotiations? Did they fight in the Community for the higher figure or were they—as we understand that they were—the mean men of Europe, paying lip service to the problems, but not putting the resources where they are needed?
There is also the key issue, to which the Minister did not address himself, of the pace of Lomé procedures—slow, slower and stop, as they are widely known in many countries. Despite what the Minister said, funds remain unspent from the days prior to Lomé I in 1975–80. In March 1984, just one year before Lomé II expired, only 20 per cent. of its aid funds had been spent and only 50 per cent. had been committed.
The fund established under the Sysmin scheme in Lomé II for assisting the mining industries of ACP states has been notoriously slow. At the beginning of this year, only one third of its 282 million ecus had been committed and only a very small amount spent.
We recognise that Lomé III introduces a range of measures to speed up the aid cycle of EC, and those are to be welcomed. We trust that they will also be adhered to. European Economic Community procedures are certainly over bureaucratic, and the understaffing of the directorate general for development of the Commission certainly does not help.
We also recognise that some of the responsibility for slow aid spending rests with the ACP states, but we trust that the Minister also agrees that in many cases they are administratively weak and that recently they have been overwhelmed, especially in Africa, by the scale of the drought crisis. Technical assistance to some extent can overcome this constraint, but a better relationship between ACP programmes and other programmes and the adequate funding of some other programmes is also important if the ACP framework and the Lomé convention are to succeed.
The Minister referred to ex-Commissioner Pisani's reference to cathedrals in the desert—not original for ex-Commissioner Pisani. Many such cathedrals in the desert have been found in southern Italy by some critics. But we recognise the point. In many cases the preference for mega-projects versus micro-projects has done little to help agricultural development. The sectoral focus of the new Lomé convention is very much open to question. Precisely how the strategic approach will work is not yet clear. The European Community is involved in the pursuit of food sector strategies already, with the Governments of Mali, Ruanda, Zambia and Kenya. This approach may hold the promise of poverty-focused, better quality aid, but to be effective it is essential that the community should get the backing of individual member states rather than that the Government should drag their feet, as they have, over providing resources for those projects.

Mr. Andrew Rowe: I am very much a tyro in this debate and am learning as it proceeds. If the Labour party were to form the next Government and took Britain out of Europe, would that strengthen or weaken our contribution to Lomé?

Mr. Holland: I think the hon. Gentleman said that he is an amateur in this kind of debate. If he followed Labour party policy he would see that it wishes to work with other European countries not only to counter the drought problem but to promote economic recovery and trade with Third world countries. I have just been to a conference in

Sweden that was attended by many other parties, several of which are in Government. Those parties — for example, the Italian Government — have been pushing for an increase in aid programme resources at a time when the British Government have been dragging their feet and proposing cuts in European food aid.
Returning to the link between emergency aid and development aid, it is important that there should be a proper link. Lomé II had an emergency aid budget of about 202 million ecus. During Lomé II the European Commmunity refused to use this money for longer term rehabilitation and development after the emergency had passed, and a period of six months was stipulated. In Lomé III the energency aid is split into 210 million ecus for emergencies and 90 million ecus for refugees. The latter can be used for the long term integration of refugees, through the provision of tools and equipment, seeds and so on.
This is to be welcomed, but it does not go far enough, not least because the finance is a pittance. It is just over 4 ecus per head for Africa's refugees. Both the ACP and European non-Governmental organisations want the concepts and procedures of emergency aid to be modified to include long term developments and activities. At a more general level, given the drought situation in parts of Africa, the transition from emergency to development aid is one of the key problems of the day. But the Government are not adequately addressing it. They have not been supporting the Commission's proposals for food aid and are not supporting the ACP countries over the higher resources that they wish to be allocated to longer term agricultural development.
We also have to question the sector strategies. The food strategies, especially with their reliance upon small-scale farming, are excellent in themselves but do not admit the kind of problems that ACP countries are facing over some of the commodities to which the Minister referred at the end of his speech. For example, one of the problems with bananas is that that product is distributed on the world market by a handful of companies, and very little of the income goes to the producers. On average, producers receive only just over 10 per cent. of the final value of the bananas that are sold in the shops. The ripeners receive over 20 per cent. and the retailers receive 30 per cent. The income that goes to those who produce the bananas is a fraction of the 10 per cent. That is the underlying type of problem with commodities. It is not just STABEX or commodity stabilisation. It is a great problem for the ACP countries and is not addressed adequately by Lomé.
Lomé also is contradicted by the EEC's common agricultural policy. One of the ways in which Lomé is designed to promote the development of the ACP is through supporting both trade with the Community and ACP exports to the rest of the world. But that objective is undermined by the operation of the CAP.
Agricultural protectionism bars a range of ACP exports to the Community market. The United Kingdom Government have failed to have those barriers removed during the Lomé III negotiations. Botswana in southern Africa and Burkina Faso in western Africa claim to have lost regional markets for beef exports due to subsidised EEC beef exports. I have been to Burkina Faso, and I trust that the Minister has been there. It is, as the Minister will be aware, one of the poorest countries of Africa. It is


wracked by drought and desertification. For the EEC's beef exports to be undermining the export trade of that country contradicts the objectives of Lomé.
Similarly, the annual sale of about 5 million tonnes of EEC beet sugar on world markets has contributed to the decline in world sugar prices to their lowest level for 15 years. That has robbed acutely dependent traditional ACP cane exporters in the Caribbean of their markets. Those policies are detrimental to the development of EEC, ACP and intra-ACP trade and should be reviewed as a matter of priority.
The EEC has also produced large grain and dairy surpluses which, in the form of food aid, have contributed to the undermining of Africa's food self-sufficiency. The directorate general for development of the Commission has been trying to reduce the negative impact of non-emergency food aid. The development council adopted a policy in 1983 which would introduce into Lomé III a stipulation that food aid must be integrated into the recipient's development policy, that financial assistance can replace food aid in some circumstances and that the EEC will continue a policy of triangular operations—in other words, buying foodstuffs in Third world countries to supply other Third world countries.
Those measures are to be welcomed. However, when the exceptional demand for food aid caused by the famine subsides there will be a strong temptation to keep food aid at the exceptionally high current levels. That must be resisted and the adopted policies must be adhered to.
More importantly, the growing EEC-US trade conflict over subsidised grain sales has crucial implications for the prospect of food self-sufficiency in Africa and the ACP in general. Should a price war break out and the international market become flooded with cheap grain, it will undermine the will of Governments to undertake the difficult reforms of agriculture designed to increase the participation of peasant farmers in national food production.
In that respect, it is relevant to refer to the role of other agencies which operate in ACP territories. That refers especially to the International Food and Development Agency. Granted that IFAD does good work—I am sure that is admitted by both sides of the House—that every £1 the United Kingdom puts into that IFAD leads to a procurement in the United Kingdom of £2, granted that Great Britain has the highest rate of procurement and that one third of IFAD's work is in Commonwealth countries, why are the Government not supporting IFAD and aiming for at least a $30 million replenishment over a four-year period?
If lip service is paid to the general objectives of the ACP arrangements, whereas in reality the Government are not prepared to put their money where their mouth is for long-term agricultural development, the Government will be taking with one hand while giving with the other.

Mr. Mark Robinson: The hon. Gentleman has given us a catalogue of suggestions for increased resources. If I read his criticism of the agreement that has been put together correctly, it is that the Government did not argue strongly enough in many sectors for additional increased resources. Is it the Labour party's policy that there should be increased resources for all the sectors to which the hon. Gentleman referred? This is only a small part of our overall aid package. Is this the focus of the Labour party's policy, or does the hon.

Gentleman believe that this should be extended across the aid board? Would the Labour Government have the funds to achieve this aim?

Mr. Holland: It might have been a good idea if the hon. Gentleman had attended the recent debate during which I was asked basically the same question by a Conservative Member. He asked what the Labour party was going to do. It is the Labour party's policy to increase aid as a proportion of GNP to 0·7 per cent. within the lifetime of one Parliament and to aim at 1 per cent. Granted the way in which the Conservative party has cut the aid programme to 0·33 per cent., which is the lowest level recorded since we started a development and aid programme in Britain, that would give us tremendous resources to disperse in other countries. It would amount to an increase in spending in current terms of about £1 billion over the lifetime of the Parliament. We certainly would have no problem in supporting the replenishment of IFAD and IDA. As for food aid and agricultural programmes in ACP countries, we certainly would meant to be able to match the Socialist-led Government in Italy and their increase in the aid programme within the Community framework rather than follow the lead of this Government who have introduced cuts.
I do not want to delay the House long on a detailed analysis of the various proposals in Lomé III, but STABEX is especially important. Under Lomé III, it has received 925 million ecu, but only three new products have been added to the list of 45 ACP products covered by the scheme. The ACP—the Minister did not point this out—had demanded that more than 40 new products should be added. In line with the EEC's line on financial rigour, the administration of STABEX has been considerably tightened—at least on paper—and ACP is now required to furnish much more information, reporting on the use to which STABEX funds are put. We recognise that there is the so-called "fangibility problem", which was popularised by Hans Singer, about the tracing of the precise use of STABEX resources. In practice, STABEX has been benefiting only some commodity producers. Over the years, these have tended to be the more affluent among the ACP countries.
There are basically three problems with STABEX. First, it is useful because in principle it rapidly responds to genuine needs arising from fallen export revenues in export states. But the introduction of bureaucratic procedures is likely to slow down the process and dilute the value of its transfers. Secondly, although the Government recognise that there is the fungibility problem, it is not clear how the EEC will in practice monitor the use of STABEX funds. Thirdly, the wisdom of investments in export commodities, currently in structural surplus in the international economy, has to be questioned. Emphasis in many of the ACP states has to be on the use of resources for diversification rather than on continued commodity support.
Also, STABEX provides no more than partial compensation for falling export revenues. In 1980 and 1981, the available funds met only 52·8 per cent. and 42·8 per cent. respectively of legitimate ACP claims, that is a 50 per cent. success record. The ACP is still seeking to be reimbursed for the shortfall. STABEX cannot replace commodity agreements designed to stabilise prices and does not undermine the rationale for increasing the size of straight loan compensatory finance facilities. UNCTAD


work on a global compensatory fund requires the serious attention of the European donor states and should command the Government's support.
There are a number of interesting dimensions to Lome III that certainly were not in Lome II or Lorne I. One concerned the role of women in the Third world and the ACP countries. Several resolutions in the European Parliament, and the resolution adopted by the development council in November 1982, have recognised the crucial role played by women in the economies of the Third world, especially in the rural sector where they work as unpaid labour. Article 123 of Lorne III for the first time specifically recognises that, and proposes that women in the ACP should gain access to training, technology, credit and co-operative organisations themselves, of their own right, and not simply through the male head of the household, or through male peasant farmers. That is welcome, since EEC aid, along with most aid, has tended to ignore the critical, indeed overwhelming, role played by women labour in the rural sector in Third world countries.
If the EEC is serious about supporting efforts towards food self-sufficiency in the ACP states, women will have to be the main beneficiaries of aid programmes. However, the Minister was talking about the progress that some of the ACP countries could make by better acquainting themselves with EEC procedures in Brussels. The women may have some difficulty. A women's unit was introduced in DG8 in 1982, but with only one woman member of staff. Only a handful of the 58 EEC delegates abroad are women. The participation of women in the EEC aid programme both in the EEC itself, in Brussels, and in the ACP, must now be strengthened, as I am sure my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) will agree.
There is also the attitude that Lomé has taken in relation to apartheid. Despite the opposition of the British Government—I stress that—article 4, annex 1, of Lomé III pledges the ACP member states
to work effectively for the eradication of apartheid, which constitutes a violation of human rights and an affront to human dignity.
Since Lomé III was signed, pressure has been mounting in Europe and the United States for Governments to take a firmer stand against apartheid. The United States Congress has proposed economic sanctions against the Pretoria regime. At the April plenary session of the European Parliament, a Socialist-sponsored motion was adopted by the 434 members of the advisory assembly. The resolution advocates the ending of investment in South Africa, the halting of state guaranteed bank loans for export financing and the reducing of commercial contacts and relations. The resolution also advocated strict adherence to the United Nations arms embargo and the suspension of sporting and cultural contacts.
The EEC Commission has declared itself willing to consider any measure
that will bring South Africa to its senses.
It has formally requested the EEC states to consider appropriate action against South Africa. EEC Foreign Ministers have also agreed to meet their counterparts in the front line states of southern Africa. It is crucial that this Government, the British Government, with the special links that we have had with South Africa in the past,

should be seen to be supporting such sanctions against South Africa, and give substance to the commitments made by the EEC Governments in Lomé III.
A further point concerns the ACP and EEC enlargement. While the Minister welcomed new members to the ACP, and while I welcome new members to the European Community, it is clear that there will be problems. Spain and Portugal signed the treaty of accession on 12 June this year. The EEC tends to emphasise the positive opportunities for ACP trade with the Spanish and Portuguese markets, although in practice it is doubtful whether those countries will switch from traditional Latin American suppliers of raw materials and commodities.
However, the ACP is concerned that Spain will displace a range of ACP exports in the EEC market, particularly fruit and vegetables, leather goods, wood products, textiles and aluminium. One particular problem concerns the export of ACP sugar to Portugal. The ACP currently supplies about 120,000 tonnes of cane sugar to Portugal, and Portugal requested an import quota of 200,000 tonnes during the initial seven-year transition period. However, the Community has insisted upon 75,000 tonnes of cane sugar at a reduced levy over those seven years. Thus a large proportion of ACP sugar exports to Portugal will be wiped out at a stroke, while Portugal comes under increasing pressure to consume EEC beet sugar. It is possible that ACP sugar exports to Portugal will disappear altogether after the transition period.
As we understand it, the United Kingdom Government tried to increase the 75,000 tonne quota allocated to Portugal—where we observe that Tate and Lyle has four refineries—but failed to do so. The lip service that the Minister is paying regarding those commodities appears to be contradicted by the facts.
Lomé III introduces a consultative mechanism for discussing such ACP concerns about EC enlargement. It is essential that the EC enters into a meaningful dialogue with and gives a sympathetic hearing to ACP countries on these matters.
Overall, Lomé III has been mixed. It has had items of remarkable interest, not pressed by this or other Conservative Governments in the EC, but demanded, as in Lomé I, by third world countries, in this case ACP countries themselves. The Minister ended his speech by referring to the role of Commonwealth countries within the ACP. Certainly, at a time when the global multilateralists approach through the United Nations has been blocked in too many cases by the United States, whether regarding IDA replenishment, the law of the sea or other measures, it is especially important that regional groupings such as the ACP and the Commonwealth, play a positive role in bridging the gap that has been left by the derogation of the United States of its international responsibilities for development.
The Minister referred to the importance of trade, and to the fact that trade alone is 30 times the EDF aid contribution. But we need a recovery programme to promote that trade. The Government have responded with a low Lomé. They have opted for the lower figures, and the cautious and inherently conservative approach. When it came to proposals from the Commonwealth, as made, for example, at New Delhi in 1983, the Government did not even say yes to a low recovery programme, but no. That is why in practice we have reservations about Lomé III and are critical of the role that the Government have


played in its negotiation. There has been no response to the genuine needs of Third world countries, such as was shown in the negotiation of Lomé I, by Claude Cheysson, Jan Pronk and my right hon. Friend the Member for Clydesdale. For that reason, although we shall not oppose

the order and although we wish the ACP countries well in achieving the ambitious objectives of Lomé III, we criticise the Government's response to those demands and the way in which they have negotiated during the past 14 months.

Mr. Bowen Wells: It is sad that this seems to be the only debate that we shall have on the Lomé convention and its signature. I sincerely hope that the Opposition and my right hon. Friend the Minister will press for a longer debate. Although I do not criticise the hon. Member for Vauxhall (Mr. Holland) for taking fully half an hour of a one and a half hour debate on this important subject, the time allotted to the House is too short for this important question.
Although the Lomé conventions have anticipated trying to increase trade with the ACP countries, they have succeeded in reducing the volume of trade that the ACP countries have enjoyed with the European Community. In 1974, 17 per cent. of the European Community's imports came from ACP countries. By 1982, only 13·8 per cent. of total imports into the EC came from ACP countries. Therefore, despite the intent of the Lomé agreements entered into by the right hon. Member for Clydesdale (Dame J. Hart) and others, the agreements have failed to increase trade with ACP countries. That is a stark fact, and from that background we should approach our approval or lack of it for Lomé III.
Unfortunately, Lomé III does not alter the position. Indeed, the trade provisions have been translated straight from Lomé II into Lomé III and, therefore, there has not been much improvement on that.
I shall confine my remarks to one or two observations rather than try to make an overall assessment of the Lomé III agreement. First, I mention the promotion of dialogue by the EC and the rejection of that by the ACP countries on the grounds that we were interfering in their internal affairs. If there is to be a relationship between the EC and the countries that we are trying to help, there must be agreement on the economic backgrounds at which they are aiming so that the projects financed by the EC fit into the pattern that is agreed between the partners in the development of trade and infrastructure. To reject that sensible approach is a retrograde step.
The way in which human rights are dealt with in those countries was severely watered down by the ACP countries' negotiators, although my right hon. Friend managed to get into the preamble of the convention a reaffirmation of the contracting partners' adherence to the United Nations charter and their faith in fundamental human rights. During the three Lomé agreements, EC aid persisted to countries which were in flagrant violation of human rights conventions and all decent human behaviour. I remind the House especially of Uganda under President Amin, when EC assistance persisted unabated to that regime. More controversially, EC aid continued to the Grenada revolutionary government.
Hon. Members are in serious difficulties when they try to find out what is happening to the administration of the EDF by DG8 in Brussels. All that we get from my right hon. Friend in answer to questions is that he does not know, because these are the responsibilities of the European Community, not his. We allocate a large sum from our ODA budget to those people in Brussels and then forget about it. We do not ask, nor do we know, how it is being administered. We cannot ask questions or get sensible and properly detailed replies.

Mr. Tom Clarke: I was interested to hear the hon. Gentleman's comments about the aid

given to Uganda during Idi Amin's regime, but I expected him to deal with the present position there. I hope that he will not disappoint the House in that respect.

Mr. Wells: I am being invited to take more of the House's time. I hope that it will not be to the disadvantage of the hon. Member for Monklands, West (Mr. Clarke), who will wish to speak in the debate. The present position in Uganda is equally horrific, as far as I can gather, especially from reports in The Sunday Times this weekend. We must re-examine our bilateral aid in that connection, and the fact that we are stepping up bilateral aid to a regime that is obviously unable to control what is happening in terms of human rights.
I should deal briefly with co-ordination. It is terrible that, in some overseas countries, the EC representative is often in competition with bilateral aid representatives, such as the ODA development division or the diplomatic mission from France, in respect of funding projects. If the host country cannot get money from anywhere else, it will go, reluctantly, to the EC, which gets the worst projects that no one else will pick up. Of course, the EC picks them up with alacrity. However, the host country does not go to the EC in the first place, because the administration of programmes by Brussels is, to say the least, Byzantine. Indeed, the word "Byzantine" could be overtaken in modern parlance by the word "EC-tine", if that is not too horrible a word.
It takes endless time to negotiate money out of the Community. I refer the House to the extraordinary behaviour of the Community on replacement aircraft for the Leeward Islands Air Transport. After immense investigation, it recommended that it would not supply the aircraft requested—the British Aerospace 748—but that it would supply an aircraft which had not yet been built or tested-and in two years' time, although the Caribbean islands wanted it to support their tourist trade this year. Extraordinary administration and rules can result in extraordinary decisions. I hope that my right hon. Friend will increase his supervision of the programme and sort out the administration in Brussels so that it works properly.
What is meant by the new chapter on sociocultural co-operation? I have no idea what it means. If it means that more money will seep into the sand by spending it on beautiful girls dancing with hoolahoops in the Pacific or under flaming swords in the Caribbean, I do not think that is a proper way to spend money.
I support what the hon. Member for Vauxhall said about sugar. Events in connection with Portugal are a disgrace. We export sugar and depress the world market, so not enabling countries to earn their own living. That is something that we must redress, and it is worth far more than the money coming through the EEC.
The multi-fibre arrangement is a restriction on trade by the Community which is unjustified by the figures. The EEC may fear competition from within its ranks, in particular in Britain or from north America, but not from Commonwealth countries or the poorest countries in the world.
We must consider the whole of the package in relation to our whole aid budget. We are in extreme difficulty because of the contraction of the budget. The effect of that contraction is serious. The amount of money devoted to multilateral aid, including EEC aid, has increased from about 19 per cent. of our bilateral aid budget five years ago to nearly 45 per cent. That explains why we have had to


be a little parsimonious in relation to the agreement. It also explains why we are pushed in every other way in our bilateral aid programme.
We have no alternative but to press the Government to increase the resources available to the ODA budget. The way to start is to replace the £100 million spent extraordinarily last year on aid to sub-Saharan Africa so that that extra amount is available for bilateral aid.
Much more could be said about the Lomé agreement, but I cannot sit down before congratulating my right hon. Friend on the way in which he has negotiated the agreement, which will provide major benefits to some of the poorest countries in the world.

Sir Russell Johnston: I pay tribute to the hon. Member for Hertford and Stortford (Mr. Wells). His knowledge and concern about such matters are special and deserve recognition. Time is short and I shall try to be brief. The hon. Member is right to criticise the usual channels, or the Government—or whoever determines the length of our debates.

Mr. Stuart Holland: The Government.

Sir Russell Johnston: I have no reason to dispute that the Government determine the length of debates.
As the hon. Member for Vauxhall (Mr. Holland) said, the sad aspect of the debate is that, despite the reference to women and other matters, Lomé III is not fundamentally different from Lomé II. The EDF is much the same, allowing for population growth and inflation. ACP exports are not in a notably more favourable position. Indeed, as the Minister said, they have even declined. However, in fairness, it must be said that the United Kingdom adopted a more flexible position than other countries—partly as a reflection of our less significant agricultural sector. I admit to a certain amount of cynicism in these matters. I suspect that if we faced the same agricultural pressures as the French, we would probably take the same attitude. Therefore, it is not really all that fancy to take a superior view.
The Alliance believes that the Community has failed in the negotiations to respond to the gathering Third world crisis that has been so well summed up in Brandt 1 and Brandt 2. We have had caution where a certain amount of boldness was required and prudence where generosity was needed.
The Minister said—and I agree with him—that trade is the touchstone of a genuine wish to help the developing countries within the ACP to achieve progress in a developing world, and it was certainly a prime objective of the negotiations. There was the resistance of France, Italy and the other southern European countries to any openness about CAP product competition. That is understandable, but it means that the trade balance between Lomé and the EEC has moved very much towards the EEC.
I understand that the ACP countries were looking for 10 billion ecu for aid, but received 7·4 billion. That reduction was, in the main, due to the resistance of the British and the Germans. That is regrettable. The Minister has his perpetual look of slight puzzlement—

Mr. Raison: How the hon. Gentleman can talk about a reduction when there was a 60 per cent. increase baffles me. That was why I was looking puzzled.

Sir Russell Johnston: Statistics can be made to prove almost anything. I certainly do not think that, in real terms, aid has been increased by 60 per cent. If we take into account population growth and inflation, that sort of figure is not real. For a Minister who is part of a Government who have cut back the United Kingdom's aid contribution to its lowest point to say that is not to be reasonable.
I wish to make two brief points to underline what has been said by other hon. Members. First, I hope that the Minister will say something about the pace of procedures, which the hon. Member for Vauxhall rightly criticised. As we are supposed to be the efficient part of the world, surely we should be able to do something about that.
Secondly, I admit to being equivocal about the issue of dialogue and human rights raised by the hon. Member for Hertford and Stortford. It is natural to say when looking at Amin — or, now Obote — that we should not be helping such a tyrannical Government. At the same time, I find it difficult to accept the argument that some poor peasant's irrigation will be stopped because he is unlucky enough to be saddled with a tyrannical Government. This is not a simple issue and it will never have a pat solution. I appreciate the Government's difficulty but that difficulty would exist in any event.
Although the hon. Member for Vauxhall was right to say that general commodity agreements would have been better, STABEX was an inspired concept. It made a notable difference and could have made more of a difference. Only a minority of ACP countries have been major recipients, and the fund, as has been said, has been severely under-financed.
It is regrettable that there has been no evident improvement as a consequence of Lomé III in the funding and extent of STABEX, and that also represents a criticism of the commitment of the EC countries to the the development of trade, because the two aspects are inextricable.
I said that the Lomé concept was good, even if many of the poor countries were excluded for historical reasons, but I cannot say that we have succeeded in seeing a sustained advance through Lomé I to III, and part — I agree not all—of the responsibility for that rests on Her Majesty's Government.
To end on a positive note, I respond happily to the Minister's reference to the impending Lomé assembly in Inverness. It is greatly to be welcomed that such international conferences are not to be confined to the metropolitan centres of the United Kingdom. At Eden Court, Inverness has the most modern theatre in the United Kingdom and I know that the ACP and European Parliament representatives will find in Inverness not only a warm Highland welcome but facilities second to none.

Mr. Eric Deakins: I, too, will be brief, because at least two of my hon. Friends wish to speak before the Minister replies.
We are dealing tonight with an agreement which, although it relates to many Third-world countries, concerns about only 15 per cent. of the Third-world population. Most of the countries are former colonies and what we have seen in the institutionalisation of Lomé I, II, and III is the creation, as it 'were, of a network of client states gathered around the EEC. Many of them might wish to be doing something else in terms of their trade with the rich countries, but they are stuck with the Lomé system,


and most of them are too scared and not in an economic position these days, in view of world recession, to escape from it.
The impetus, therefore, is on the rich countries of the EEC — the 10 member states — to try to improve the terms of Lomé from one Lomé convention to another. That has not happened on this occasion.
As the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) rightly said, the amount of aid is roughly equivalent to Lomé II, allowing for inflation. I am not certain that it has allowed for population increase—indeed, I do not think it has—but I shall return to that shortly.
A disturbing feature of the aid package is the increased emphasis on programme aid. I have grave reservations generally about programme aid to developing countries, partly because we cannot monitor it sufficiently well and partly because, in principle, it is objectionable. We should be concentrating on development projects, and they should be responsible for raising the revenue. If they cannot do that, we must look more fundamentally at their production, agriculture, and so on, rather than just give them money on a temporary basis.
There is also great emphasis on private capital. That may be part of the Government's general economic policies in relation to the rest of the world. We are dealing with some of the poorest countries, and I cannot believe that there are many profitable opportunities for private capital in many of the 65 or so Lomé convention countries. To believe that private capital would make up the differences is to indulge in wishful thinking.
One of the factors that is worsening conditions, apart from the general world recession, is the rapid growth in population, especially in African countries. Does the Lomé convention say anything about the need for appropriate population policies in such countries? Is any part of the aid programme geared, as is part of our own programme, to mother and child health care, family planning and the provision of contraceptive facilities, for example?
Lomé III is not better than Lomé II, and it might be slightly worse when it comes to trade. As the Minister fairly observed in his opening remarks, the proportion of trade between the ACP countries and the Community has declined. The Community has probably benefited slightly in that its share of trade has fallen less than that of the ACP countries in Community markets.
There is a difficulty, because many of the countries with which we are concerned are basically agricultural communities, and they come up against the protectionism of the CAP. That is a major factor which inhibits the growth of exports and their means of earning sufficient foreign exchange to enable them to pay for essential imports and to improve their living standards generally. It is regrettable that, unlike Lomé II, no sugar arrangement has been negotiated. I do not know whether that is still on the cards and may come about subsequently. Sugar arrangements are important to a number of countries, not only those in the Caribbean. For example, they are important to Fiji and Mauritius.
The Lomé agreement is supposed to be a marvellous example of North-South co-operation, but it has become institutionalised. It is concerned solely with trade and aid; but I recognise that both are important. However, the ACP

countries have not been able to get the 10 member states to change their policy at the World Bank and the IMF. Such institutions have a much greater impact on the life and economic development prospects of ACP countries than anything which happens under Lomé I, II or III.
The debt problems of many of the countries that come within the debate have not been addressed by the convention. If it provides a forum for some sort of North-South discussion, these matters should be alluded to, discussed and referred to in a communiqué with continuing discussions after the ratification of the convention. The agreement is not a good one, but it is probably the best that could be hoped for from the EEC. There is a danger that Lomé agreements will become increasingly in-stitutionalised, bureaucratic and set in their ways. That is unfortunate, because we need above all greater openness and flexibility and a willingness to consider the point of view of the other side. I do not think that we are seeing signs of that at present.

Mr. Mark Robinson: I shall not detain the House long because I know that Opposition Members wish to contribute to the debate. I welcome the fact that the agreement has been reached and that the order is before the House.
The point made by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) is worth repeating. The Government showed considerable flexibility in the negotiations compared with some of our European partners arguing their case both strongly and strenuously for improvements, not all of which they were able to achieve at the end of the day.
Having listened to the speech of the hon. Member for Vauxhall (Mr. Holland), I could not help thinking—this case was advanced eloquently by my hon. Friend the Member for Hertford and Stortford (Mr. Wells)—that the Lomé agreement is not the handle upon which to hang the case for increased development assistance.
We are well aware of the problems in Africa—the drought and the need for food aid. I agree with the hon. Member for Vauxhall that as soon as practicable we must move the emphasis from emergency food aid and look seriously at the medium and long-term programmes for giving support in the drought-affected countries, and also learn the lessons of the second major drought in 10 years. We must find a way to provide additional resources for such programmes, in the hope that, as the years go by, we can help to prevent a recurrence of that sort of tragedy. I do not think that the Lomé agreement is necessarily the means to achieve that aim.
We have heard this evening about the slowness of procedures within the EEC and the difficulties that the signatories to the Lomé convention have in battling their way through them. Although some Lomé signatories may be disappointed with the end product of the agreement, I still believe that our Commonwealth friends will welcome the third agreement as the best that could be achieved in the circumstances. Certainly it should be seen as yet another important landmark in the continuing co-operation with our Commonwealth partners.

Mr. Tom Clarke: The hon. Member for Newport, West (Mr. Robinson) made a very telling point, not so much in his speech as in his


intervention, when my hon. Friend the Member for Vauxhall (Mr. Holland), certainly to my satisfaction, was able to remind the House of the importance of resources. It is not enough to talk about new means of negotiating, agreeing, getting together, drawing up future structure plans, and so on, if the resources are not to be made available. To that extent, the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) was right to mention the Government's record on aid, but an increase of 60 per cent. to a country with inflation running at 800 per cent. does not represent very much.
My hon. Friend the Member for Walthamstow (Mr. Deakins) was right to remind us that the ACP countries represent 65 Third world countries, and only 15 per cent. of the population of the Third world. That is a very limited number of people in relation to the full potential available to the EEC and the challenge that lies before us.
I am grateful to the hon. Member for Hertford and Stortford (Mr. Wells) for his references to Uganda. I appreciated the fact that he reduced the length of his speech to enable some of us to take part in the debate. I wholly endorse what he said. There is a growing worry about current events in Uganda. If the recent report of Amnesty International in yesterday's Sunday Times is only half right, we should be worried.

Mr. John David Taylor: Is there not a danger that, with the press publicity given to Uganda, we shall concentrate too much on Uganda and ignore some of the other signatories to the Lomé agreement? It may be that in Uganda the Opposition parties are not being dealt with in accordance with the standards that are accepted as normal and reasonable in Western Europe, but, after all, they do have an Opposition. There are other Lomé countries, such as Mozambique, Angola and Ethiopia, which do not even allow an Opposition to exist.

Mr. Clarke: I have never believed that one ought to be selective about human rights. If the right hon. Gentleman takes that view, he will join us in saying that, leaving aside the Opposition in Uganda, there seems to be clear evidence of the type of unacceptable oppression that took place under Idi Amin. That must be just as unacceptable today.
Lomé has funds, but it is not yet appearing as an instrument for development to the extent that we should all like. The Minister is in danger of being oversensitive yet again—I remind him that he has the right of reply—as he told the House of the words of Edgard Pisani, who also said:
The fact remains that without major changes ACP/EEC co-operation will soon appear to be useless through its failure to get to the roots of the ills that it sets out to cure.
That is a fair comment. When considering these matters, it is reasonable to bear in mind the immediate problems and how much progress is being made in development policies and in encouraging the countries involved to take development seriously.
I accept some of the Minister's criticisms about duplication in projects and too many prestigious projects. I have said much the same in earlier debates. I accept his anxieties about food self-sufficiency, but we should remember what the President of Botswana said about the need for a new international economic order. My hon. Friend the Member for Walthamstow rightly reminded us of the problems of the world debt crisis, inflation, recession and the decline in exports and the falling

commodity prices of Third world countries. I regret that Lomé III does not appear to address itself to those problems.
Nevertheless, I wish Lomé III well in the spirit of urging an end to the political in-fighting so that a strategy for the future might be prepared. The important role of agriculture, food production and development should not be forgotten. If the ACP countries take that view, there can be a genuine response from Europe, which will therefore accept some criticism about its policies, especially about protectionism and the growing food surpluses. If we can achieve that, we shall have made tremendous strides.

Mr. Raison: With the leave of the House, I should like to reply to the debate. I cannot take up every point tat has been made—there have been many—and I shall write to hon. Members about matters that I am unable to deal with.
The response of the House has been a little too niggardly. I realise that party politics occasionally enter our deliberations and sometimes lend a certain colour to the attitude of the Opposition to what the Government are doing. I have been frank about the weaknesses of Lomé. I have not tried to pretend that it has all been perfect, but we are discussing something of real importance in respect of which the balance of advantage is clear.
Lomé III is different from the predecessor conventions in a number of worthwhile respects, some of which were mentioned in the debate. The trade provisions have been strengthened, and that was brought about by the British effort. We made the running in trade matters.
There are other ways in which the new convention is an improvement on its predecessors. One is the so-called policy dialogue. We did not get all that we should have liked, but I was closely involved in the negotiations and the new provisions will ensure that we can have a more thorough discussion about the policy context in which aid is given than has been possible in the past. The Government believe that that is necessary and I believe that it will make the new instrument more effective than its predecessor. It will include an emphasis on sectoral matters, a topic that the hon. Member for Vauxhall (Mr. Holland) queried. Sectoral discussions are at the heart of the policy dialogue—moving on from a discussion of the project in isolation to look at a whole area, whether farming, mining or whatever.
There are also other respects in which the new convention is better than its predecessors. In terms of the resources made available, the ACP countries have got a very good deal.

Dr. Norman A. Godman: The Minister in his opening speech said that provisions for sugar, rum and banana crops had been improved. Would not it make sound sense to the ACP cane sugar producing countries if Portugal took much more cane sugar and much less EEC-produced beet sugar?

Mr. Raison: I do not dispute what the hon. Gentleman says. It would be better for the ACP countries if Portugal took more than the 75,000 tonnes that was agreed. But no one fought harder than the United Kingdom on behalf of the ACP sugar producers. If we had not fought the battle, they would not have got the 75,000 tonnes. We can again claim that the British contribution was one of considerable importance.
It is not possible for me to cover everything in the three minutes that remain, but the important matter of human rights was mentioned by a number of hon. Members, including my hon. Friend the Member for Hertford and Stortford (Mr. Wells), who, as always, made a thoughtful and interesting speech. The issue was looming throughout the negotiations, but it was not settled until the end. It was unquestionably one of the difficult aspects of the negotiations.
The United Kingdom and a number of other Community member states felt that it would be wrong entirely to dissociate the granting of Community aid from respect by recipient countries for human rights. It is well known that a number of ACP countries objected to that, because they claim that the basis of the Lomé convention is that it is a treaty between equal parties and that it imposes a contractual obligation to give aid, regardless of anything else.
However, we are concerned about human rights, and the final text agreed with ACP states clearly reaffirms the contracting parties' adherence to the principles of the United Nations charter and their faith in fundamental human rights. That is a firm basis on which we can build. We are also able to reach agreement with the ACP states on a joint declaration reiterating our deep attachment to human dignity and reaffirming our commitment to work to eliminate all forms of discrimination. That includes apartheid.
Those texts will not, in themselves, bring about a radical improvement in human rights in many states. The contractual nature of the convention and the need for predictability in planning development mean that the disbursement of aid cannot simply be a function of changes in the degree to which human rights are observed. Nevertheless, the texts are contained in the covention and can therefore be invoked in the most flagrant cases in which elementary human rights are abused. They are important and reflect the concern that has been expressed this evening by hon. Members.
The multi-fibre arrangement was referred to by my hon. Friend the Member for Hertford and Stortford. My right hon. Friend the Minister for Trade has told the House that the Government, while favouring a further multi-fibre arrangement, want it to be more liberal, with improvements concentrated upon suppliers who themselves have liberal import regimes and, of course, upon the poorest suppliers. That has always been the point of view of this country—
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business).

Question agreed to.

Resolved,

That the draft European Communities (Definition of Treaties) (Third ACP-EEC Convention of Lomé) Order 1985, which was laid before this House on 23rd May, be approved.

Scottish Institute of Agricultural Engineering

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]

Mr. Alexander Eadie: I am initiating a debate on a proposed cut in funding of £1·1 million from a budget of £1·7 million for the Scottish Institute of Agricultural Engineering at Bush estate, Penicuik. This is part of the overall reduction of about £4 million in agricultural research expenditure.
The lunacy of cutting back upon agricultural research in Scotland is compounded by the swipe that is being taken at the Scottish Institute of Agricultural Engineering, to be found in the consultative document. Mr. David Hinton, convenor of the labour and machinery committee of the Scottish National Farmers Union, said:
Our initial reaction to this document"—
he was referring to the consultative document—
is one of concern. The Scottish Office have proposed massive cuts in the funding of the Scottish Institute of Agricultural Engineering. The engineering work carried out at the SIAE has concentrated on the special needs of the Scottish industry, many sectors of which are markedly different from those in England and Wales. Provision must be made to continue an adequate basis for Scottish Research in this important field … The union is in the process of assessing the complete Agricultural Research and Development picture in Scotland. We will—in due course—be submitting detailed suggestions on the future of Research and Development in Scotland. We recognise the need for increasing efficiency but we reiterate our opposition to the scale and timing of these proposed cuts which owe more to dogma than logic.
I suggest that dogma and logic are a regular hallmark of this Government's actions. When challenged one can only describe their answers by using Edmund Burke's classic descriptiion: the economy of truth.
It was a classic example of hamfistedness when the staff of the Scottish Institute of Agricultural Engineering at Bush estate, Penicuik, read in The Scotsman that their jobs were under threat. The policy of "shoot first, tell later", was confirmed on 18 May when they learned that the Department of Agriculture and Fisheries for Scotland, which finances the seven Scottish agricultural research institutes—the Bush estate, Penicuik section being one of them—had published a discussion paper entitled "A Strategy for Agricultural Research and Development." It detailed the financial cuts to be made in applied agricultural research in Scotland.
At present, only 7 per cent. of the £31 million Scottish agricultural research and development budget is spent on engineering. The proposed cuts would reduce this figure to less than 2 per cent., a cut of 70 per cent. The annual budget of the Scottish Institute of Agricultural Engineering of £1·7 million will thus be reduced to about £500,000 or £600,000. One would damage one's eyesight if one tried to find any reason in the document for singling out engineering for such a savage cut. That outrageous proposal is made to stand on its head when one realises that just three months ago the Department of Agriculture and Fisheries for Scotland published a document entitled "Agricultural Research and Development 1985" in which much of the work of the Bush estate institute was highlighted as being topical and of high priority. Within two months, the Department of Agriculture and Fisheries


for Scotland did an about-turn. Long-term research programmes given priority in March were discarded in May.
Today, I have received a letter from the Scottish NFU. It will be making a submission. The union will be pointing out that over four months the Department of Agriculture and Fisheries for Scotland has completely altered its view of the value of agricultural research in Scotland. I do not want to go into the letter in detail, but it is a powerful indictment of the Government's policy and attitude.
A study of the consultation document reveals a number of striking inconsistencies, omissions and errors of logic in addition to a number to debatable statements and conclusions.
One criterion put forward by the Department of Agriculture and Fisheries for Scotland for the allocation of research and development funds is that output at present in surplus should receive less support. However, a respected committee of the Royal Society headed by Professor Bernard Crossland showed recently that a lack of research and development in the agricultural engineering industry between 1966 and 1980 led to a 2·6 per cent. decline in exports and a 112 per cent. increase in imports. Applying the logic of the Department of Agriculture and Fisheries for Scotland, the industry merits the additional funding recommended by that committee rather than the proposed cuts.
The Department of Agriculture and Fisheries for Scotland states its intention to support high quality research, some parts of which serve as the United Kingdom's focus of excellence. It fails to acknowledge that section of the Bush estate as a United Kingdom centre of research into the mechanisation of the potato crop in which it has an international reputation.
The Scottish Institute of Agricultural Engineering on the Bush estate is also internationally recognised for its work on soil compaction, and on the behaviour of agricultural machinery on sloping ground.
The potato crop and soft fruits are singled out as important commodities in Scottish agriculture and yet those are the sectors of the Scottish Institute of Agricultural Engineering expertise which in the past have received a low priority, or have been discouraged by the agricultural heads in New St. Andrew's house in Edinburgh.
I wish to deal with some of the economic benefits of the Scottish Institute of Agricultural Engineering. There are considerable potential economic benefits from the application of its research programmes. For a modest cost to the Department of £1·7 million per annum as well as reductions in input costs those benefits include, first, increased cereal yields through a combination of optimum soil structure, the elimination of losses due to compaction effects from straw disposal, adoption of a zero traffic system with broadcasting, and subsoil loosening. These have a potential worth of £177 million per annum in Scotland alone. The use of soil engineering to limit forest windthrow could be worth £7 million per annum in Scotland.
Secondly, grazing improvements in Scotland through strip seeding have an estimated potential value of £39 million per annum. Improved straw incorporation techniques could save £1·8 million per annum while gains from shallow ploughing could be £5 million per annum. Examples of the value to Scotland of ad hoc development

work are the chicken feeder, with a saving of £2·5 million per annum, and crop deflectors, with a saving of £500,000.
Thirdly, the introduction of the institute's developed equipment and techniques to reduce potato damage could save up to £126·7 million per annum.
Fourthly, the elimination of tractor overturning accidents could save United Kingdom resource costs of £3·8 million per annum.
Fifthly, optimal forage conservation in the cool wet climate of Scotland could increase the value of home-produced forage for this region by up to £190 million per annum.
Sixthly, agriculture energy savings of £5 million per annum could be achieved in Scotland simply through efficient management based on the institute's work at the Bush estate.
Seventhly, the machine loads investigation could lead to savings for the United Kingdom in material costs of non-rotary soil working tools of £1·4 million per annum.
Eighthly, adoption of mechanical harvesting of raspberries by Scottish growers, based on the institute's machine specification, would increase profitability by £1·4 million per annum.
The benefits identified for Scotland alone would total £424 million per annum. For northern Britain, this figure could be doubled. Addition of the benefits identified for the United Kingdom as a whole — £101 million per annum—gives a total of £949 per annum. The potential benefit:cost ratio from the application of that programme in asingle year would be 500:1. If even 20 per cent. of the benefits were achieved to give a benefit:cost ratio of 100:1, this would be excellent value for public money by any standards. The benefits that are achieved will continue far beyond the duration of the projects on which they were based. Meanwhile, the cost resources can be devoted to new work to generate new potential benefits. The scale of benefit projected for the present programme is broadly similar to that obtained for completed past projects—for example, the x-ray separator—and for similar work elsewhere.
In amplifying my case, I want to quote an unsolicited letter that I received from Findlay, Irvine Ltd. It is captioned:
Scottish institute of Agricultural engineering.
The letter states:
The proposal to cut the budget of the S.I.A.E. by a figure (according to the Press) of £1·1 million out of a budget of £1·7 million is a very damaging one. We have worked with The Bush for nearly twenty years, and although we cannot judge the quality of all their work, the projects with which we have been involved have been relevant to the needs of agriculture, and their research has produced useful devices.
For instance, the Bush Recording Soil Penetrometer which is made here and sold worldwide, was originally designed at The Bush. Sales are steadily growing and make a worthwhile contribution to employment by a small local manufacturer. Research institutes in the USA, Australia, New Zealand, India, Malaysia, and Iran have all bought this instrument simply because it is the most advanced in the world.
Cuts in civil service expenditure have my full support but one has to be selective. Cuts at the S.I.A.E. would strike at precisely the kind of wealth-creating process the Government is trying to foster.
I should like to call in aid a report on tractor safety, for the saving of lives should have the same priority in the agriculture industry as in any other industry. The institute's work on safety is unique in Britain. It is of vital social concern, and has a worldwide reputation. The


United Kingdom focus of excellence on that subject is at the institute. It is a proper research topic for public funding. The institute's work is highly valued by the Health and Safety Executive, which respects its independent position and is unable to commission similar work at any other centre in Britain, including its own research laboratories.
There are an estimated 85,000 farm accidents annually in Britain, of which 1,244 are tractor overturning accidents. The total resource costs to the British economy of those accidents is £94·3 million and £3·8 million, respectively, but the average cost of tractor overturning accidents is disproportionately high at four times the average cost of other accidents. Small and medium-sized farms account for more than 85 per cent. of total unreported accident costs. Those farms are situated predominantly in less favoured areas, and the clear relevance of tractor safety on slopes research to the hill and upland areas points to the acute need for funding such research in Scotland. The work is directly applicable to other land uses in the upland areas, especially forestry.
The institute has been conspicuously successful so far. The comprehensive research on the causes of tractor overturning accidents now provides standard training material used by colleges of agriculture, the Health and Safety Executive, the agricultural training board and the advisory services throughout the United Kingdom. The institute slope monitor and four-wheel drive engagement alarm have both been taken up commercally. The main goal of the institute's work, however, is yet to be reached—determining when a tractor is being operated safely on a slope and when it is not. Currently the tractor driver still has to operate in total ignorance of his degree of safety. If the institute's work is interrupted or terminated now, the real benefit of its achievements will be largely lost to the farming community.
The Department of Agriculture and Fisheries for Scotland proposes to set up a form of contingency fund. The annual cost of that will eventually almost match the slash in the engineering budget. But the Department has no idea what it wants the fund for. Perhaps it is following too closely the example of our southern neighbour, the Agricultural and Food Research Council, from which it takes scientific advice. It has found a need for a contingency fund, probably because it is an organisation that stands alone. However, the Department is part of the Scottish Office and has always benefited from the flexibility—to the extent that it has never needed a separate contingency fund at any time in the past 40 years. It is therefore totally inappropriate to set up such a fund when drastic cuts in the budget are proposed.
The Department of Agriculture and Fisheries for Scotland has declared a set of priorities for agricultural research in Scotland. Engineering has a vital, often fundamental, contribution to make to each and every one of them. All that potential is put at risk by the ambition to have a contingency fund·the latest status symbol. Now it may be argued that the Department has been obliged to prepare its consultation document at short notice to satisfy the demands of the Chancellor of the Exchequer to reduce expenditure. However, the manner in which engineering has been selected to bear the brunt of those costs betrays a lack of knowledge and appreciation of the serious long-term consequences for Scottish agriculture.

The indecent haste associated with the consultative document published in May — a response has been demanded for June—makes it vital that the Secretary of State should be made aware of the serious consequences that can only be described as senseless agricultural vandalism in Scotland.
All those concerned with the welfare of Scottish agriculture should ensure that their views are known to the Government. The Scottish Institute for Agricultural Engineering at Bush estate in Penicuik should be expanded, not contracted.
When I led a deputation on Friday to meet one of the Minister's hon. Friend's, and I argued that the consultation period was inadequate, he said that we had nothing to worry about and that the consultative period would be extended. Will the Minister confirm that the consultative period will be extended, and that we will not be involved in decision-making at the end of June after a May publication?

The Parliamentary tinder-Secretary of State for Scotland (Mr. John MacKay): I congratulate the hon. Member for Midlothian (Mr. Eadie) on raising this debate and on the way he has presented his case. I have listened carefully and with interest to the points he has made.
The Scottish Institute for Agricultural Engineering is one of seven Scottish agricultural research institutes which are funded by my right hon. Friend the Secretary of State for Scotland through the Department of Agriculture and Fisheries for Scotland. These institutes, together with those of the AFRC, constitute the agricultural and food research service which is an extremely powerful scientific capability available to meet the needs of the United Kingdom agriculture industry.
The programmes of research and development, which are commissioned by the Department of Agriculture and Fisheries for Scotland, aim to advance scientific understanding and to improve the cost-effectiveness of the output of plant and animal production systems, taking into account social, environmental and animal welfare considerations. The Scottish agricultural research institutes are centres that significantly contribute to, and in some cases lead, the agricultural research and development effort in the United Kingdom.
Our financial commitment is significant. For the current financial year the maintenance allocation to the seven institutes will total £20·1 million, with a further £3·5 million for capital, a total of £23·6 million, while a further £7·4 million of the Department's funding of the agricultural colleges goes to support research and development, comprising £6·9 million for maintenance and £0·5 million for capital. Since we came to office we have increased the level of maintenance grant to the Scottish research institutes. In 1978–79, the year before we came to power, Government allocations towards the maintenance costs of the Scottish agricultural research institutes totalled £9·4 million. In the current year we have allocated £20·1 million, an increase in real terms of 13 per cent. The corresponding figures for the Scottish Institute of Agricultural Engineering were £0·7 million in 1978–79 and £1·7 million in the current year—an increase of 26 per cent. in real terms.

Mr. Eadie: Are those figures at 1983–84 prices?

Mr. MacKay: If the hon. Gentleman had listened, he would have realised that I gave the prices at the sums spent in that year, and that the percentage increase was in real terms.

Mr. Eadie: What year?

Mr. MacKay: It does not matter what year, because the figures were expressed in real terms.
In last year's public expenditure survey, the Government decided to reduce the public funding of agricultural research and development in 1986–87 and 1987–88. That decision, which was announced in the public expenditure White Paper published in January, reflects our aim that the industry should make a greater financial contribution to the funding of the research and development from which it benefits. The reductions are being shared by the Ministry of Agriculture, Fisheries and Food and the Department of Agriculture and Fisheries for Scotland in the ratio of their expenditure on research and development. That means that, in Scotland, the planned provision for expenditure of about £32 million on research and development work at the Department's funded institutes and colleges will be reduced by about £3·1 million in 1987–88. That means that, in 1987–88, expenditure will be £28·94 million, which is a considerable sum to spend on research and development, and which does not merit some of the hon. Gentleman's lurid descriptions.
Having sketched the background, may I move to the consultation paper issued by the Department. Good management of any enterprise requires that its activities be monitored and reviewed to ensure that the essential objectives and needs are being met, and that it is responsive to shifts in the patterns of need and the demand for the services. The needs of the agriculture industry do not stand still. The industry would generally acknowledge the contribution which the work of research has made to efficiency and profitability today. In terms of yields and efficiency, the industry has developed at a tremendous rate since the end of the second world war. But the position is constantly changing. We are all familiar with the problem of surpluses; there is greater public concern for the future of the environment and its interface with agriculture; there is pressure to improve the welfare of farm animals; and there is considerable interest in the relationship between diet and health.
Against that background, it is essential that we review our strategy for the future of agricultural research and development, and that we assess the extent to which our resources are being devoted to the priorities that we consider most deserving of attention. It is also necessary to ensure that our priorities are right and that the taxpayer is getting good value for his money. In this context, it does not seem at all unreasonable to expect the prime beneficiaries from the fruits of agricultural research and development to make a contribution towards the costs. This is a matter which the Agricultural Departments are pursuing with the industry.
The present pattern and distribution of research institutes has existed for many years. Obviously there have been modifications in their programmes of research over time, but from time to time it is necessary to stand back and take a good, hard look at what is going on and to assess carefully how we should go forward. The consultation paper does just that, and proposes a strategy for the future,

having regard to future reductions in public funding. It has been distributed widely to all interested parties, including the trade union interests. All the comments made will be thoroughly considered before final decisions are taken on the strategy for the future and on any organisational changes which may be required in the structure of the present research institutes.
The Scottish Institute for Agricultural Engineering, which is the subject of immediate concern to the hon. Gentleman, is one of the more recent institutes, having been founded after the war. It has close links with the National Institute of Agricultural Engineering at Silsoe in England; indeed, both institutes are governed by the same governing body, the British Society for Research in Agricultural Engineering. However, the governing body has appointed a Scottish committee to advise on the programme, staff, finances and management of the SINE and on matters relating to activities in Scotland.
The hon. Gentleman raised several specific points about the proposals affecting the institute in tonight's debate and in a letter to my right hon. and noble Friend the Minister of State, who will be responding by letter to the hon. Gentleman. I also have a copy of the response to the consultation paper from the staff of the institute. The latter document is lengthy and comprehensive, and I assure the hon. Gentleman that all the points that he and the staff have made will be fully considered. Indeed, the Secretary of the Department has told the staff representatives that he will be glad to met them early in July to discuss their representations in detail before putting the overall position to Ministers for their further consideration.
However, I wish to comment on a few points. The hon. Gentleman alleged that insufficient time was allowed for the submission of comments on the proposals. I cannot accept that we are proceeding with undue haste. A period of more than six weeks was allowed for the submission of comments, which is surely not unreasonable, as is borne out by the fact that the staff at the SIAE were able to put together such a comprehensive response as the one they sent to us within one month.
I should make it clear that the consultation paper proposes reductions in funding of research on engineering, but it should not be taken as implying that there will be a cessation of research in engineering in Scotland. We fully accept that agricultural engineering has an important role to play in improving the efficiency of farming practice, and we intend to maintain an engineering capability in Scotland. But the scale of the effort must be assessed in relation to the competing claims on our scarce resources. Other areas of work will have to be covered to meet the required targets. It is essential that the Department concentrates its funding within engineering and other areas on the most productive research opportunities.
I refer now to the developing relationship between the agricultural engineering industry and the Government. The commitment of Government to support the industry has been clearly demonstrated by the creation in 1984 of the agricultural machinery partnership. This is a new initiative aimed at creating—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at ten minutes past Twelve o'clock.